IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v59y1992i4p795-812..html
   My bibliography  Save this article

Durable Goods Monopoly with Incomplete Information

Author

Listed:
  • Lawrence M. Ausubel
  • Raymond J. Deneckere

Abstract

This article reconsiders the durable goods monopoly problem when the monopolist's marginal cost is private information. We show that the Coase Conjecture implies the No Trade Theorem: In any equilibrium in which the lowest-cost seller's initial offer approaches her marginal cost, the aggregate probability of trade must vanish. However, we also construct non-Coasean equilibria which approximate the unique outcome of the rental version of the same model. These (stationary) equilibria are comparatively efficient. The results are equally applicable to the mathematically-equivalent problem of sequential bargaining with two-sided incomplete information where one party makes all the offers.

Suggested Citation

  • Lawrence M. Ausubel & Raymond J. Deneckere, 1992. "Durable Goods Monopoly with Incomplete Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 795-812.
    • Handle: RePEc:oup:restud:v:59:y:1992:i:4:p:795-812.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/2297998
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arieh Gavious & Ella Segev, 2017. "Price Discrimination Based on Buyers’ Purchase History," Dynamic Games and Applications, Springer, vol. 7(2), pages 229-265, June.
    2. Giacinta Cestone & Lucy White, "undated". "Anti-Competitive Financial Contracting: The Design Of Financial Claims," UFAE and IAE Working Papers 453.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Dimitri Vayanos, 1999. "Strategic Trading and Welfare in a Dynamic Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(2), pages 219-254.
    4. Roman Inderst, 2005. "Bargaining with a Possibly Committed Seller," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(4), pages 927-944, October.
    5. Jarque, Xavier & Ponsati, Clara & Sakovics, Jozsef, 2003. "Mediation: incomplete information bargaining with filtered communication," Journal of Mathematical Economics, Elsevier, vol. 39(7), pages 803-830, September.
    6. Xavier Jarque & Clara Ponsat?Author-Name: Jozsef Sakovics, 2001. "Mediation: Incomplete information bargaining with," UFAE and IAE Working Papers 502.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    7. Wang, Ruqu, 2001. "Optimal pricing strategy for durable-goods monopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 789-804, May.
    8. Subramanian Balachander & Kannan Srinivasan, 1998. "Modifying Customer Expectations of Price Decreases for a Durable Product," Management Science, INFORMS, vol. 44(6), pages 776-786, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:59:y:1992:i:4:p:795-812.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.