Outside Options and the Failure of the Coase Conjecture<xref ref-type="fn" rid="f1" ptype="faer1042656" citart="citart1"><sup></sup></xref>
نویسندگان
چکیده
A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. Each period the buyer can also exercise an outside option, abandoning their search or moving on to another seller. We show there is a unique equilibrium in which the seller charges a constant price in every period equal to the monopoly price, contravening the Coase conjecture. We then embed the singleseller model into a search framework and show the result provides a foundation for the usual “no haggling” assumption. (JEL C78, D42, D43, L12, L13)
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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected].
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