Depreciation erodes the Coase Conjecture
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Cited by (32)
Quality and price personalization under customer recognition: A dynamic monopoly model with contrasting equilibria
2020, Journal of Economic Dynamics and ControlCitation Excerpt :In particular, using a model with heterogeneous valuations where each consumer buys at most one unit, Bulow (1982) confirms this result for the ”No Gap” case, defined as the situation in which the constant marginal cost is higher than the willingness to pay for the good of the (unserved) consumer with the lowest valuation. There are a number of exceptions (see, e.g. Kahn, 1987, for non-constant marginal cost, Karp, 1996, for durable goods subject to depreciation, and Mason, 2000 or Laussel et al. (2015) for the case where the durable good generates consumption network effects). In the context of non-renewable resource markets, various authors have shown that the lack of ability to commit may reduce monopoly profit, or make monopoly power disadvantageous (Kemp and Long, 1980; Maskin and Newbery, 1990).
Price and death: modeling the death effect in art price formation
2016, Research in EconomicsCitation Excerpt :To analyze the pertinent market interactions, we present a Stackelberg differential game between perfectly rational, forward-looking producers and consumers. Standard models of durable goods monopolies employ the concept of the Perfect Rational Expectations Equilibrium (PREE) which is defined by a pair of continuous functions that only depend on the current state of the system; one of these functions describes the buyers׳ expectations, the other one the monopolist׳s sale strategy (e.g. Stokey, 1981; Kahn, 1986; Bond and Samuelson, 1987; Karp, 1996; Driskill, 1997). In equilibrium, the buyers׳ expectations are satisfied along the realized path of production and the seller׳s production strategy maximizes the present discounted value of profits, given the buyers׳ expectations.
Network effects, aftermarkets and the Coase conjecture: A dynamic Markovian approach
2015, International Journal of Industrial OrganizationCitation Excerpt :Starting with the seminal work of Coase (1972), a vast literature has studied the optimal monopoly pricing of durable goods. See, for example, Stokey (1981), Bond and Samuelson (1984), Kahn (1986), Gul et al. (1986), Ausubel and Deneckere (1989), Karp (1996a,b) and Driskill (1997) among others. Kuhn and Padilla (1996) considered a monopolist selling both a durable and a non-durable good to a representative consumer with linear-quadratic preferences over the two goods (that may be complements or substitutes).
Large shareholders, monitoring, and ownership dynamics: Toward pure managerial firms?
2013, Journal of Economic Dynamics and ControlNon-linear strategies in a linear quadratic differential game
2007, Journal of Economic Dynamics and ControlMultiple equilibria in dynamic rational expectations models: A critical review
2006, European Economic Review