Coase versus Pacman: Who Eats Whom in the Durable-Goods Monopoly?
In standard durable-goods monopoly models, both the set of buyers and the set of prices are assumed to be continua. If the set of buyers is finite, the perfectly discriminating monopoly outcome is a unique subgame perfect equilibrium when the seller is sufficiently patient. Introducing instead a smallest unit of account yields the Coasian outcome as a generically unique subgame perfect equilibrium for patient enough buyers. A folk theorem is obtained if both sets are finite. These results reflect a strategic disadvantage of having to make moves with a large impact on other players' payoffs. The analysis is extended to durable-goods oligopoly. Copyright 1995 by University of Chicago Press.
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- Van Damme, Eric & Selten, Reinhard & Winter, Eyal, 1990.
"Alternating bid bargaining with a smallest money unit,"
Games and Economic Behavior,
Elsevier, vol. 2(2), pages 188-201, June.
- Van Damme, E. & Selten, R. & Winter, E., 1989. "Alternating Bid Bargaining With A Smallest Money Unit," Papers 8932, Tilburg - Center for Economic Research.
- van Damme, E.E.C. & Selten, R. & Winter, E., 1990. "Alternating bid bargaining with a smallest money unit," Other publications TiSEM b8a7cc1a-cef1-470a-9239-3, Tilburg University, School of Economics and Management.
- van Damme, E.E.C. & Selten, R. & Winter, E., 1989. "Alternating bid bargaining with a smallest money unit," Discussion Paper 1989-32, Tilburg University, Center for Economic Research.
- Erik van Damme & Reinhard Selten & Eyal Winter, 1989. "Alternating Bid Bargaining with a Smallest Money Unit," Discussion Paper Serie A 253, University of Bonn, Germany.
- Lawrence M. Ausubel & Raymond J. Deneckere, 1987. "One is Almost Enough for Monopoly," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 255-274, Summer.
- Faruk Gul, 1987. "Noncooperative Collusion in Durable Goods Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 248-254, Summer.
- Gul, Faruk & Sonnenschein, Hugo & Wilson, Robert, 1986. "Foundations of dynamic monopoly and the coase conjecture," Journal of Economic Theory, Elsevier, vol. 39(1), pages 155-190, June.
- Faruk Gul & Hugo Sonnenschein & Robert Wilson, 2010. "Foundations of Dynamic Monopoly and the Coase Conjecture," Levine's Working Paper Archive 232, David K. Levine.
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