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Outside Options, Reputations, and the Partial Success of the Coase Conjecture

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  • Jack Fanning

Abstract

A buyer and seller bargain in continuous time over a good. Bargainers can be rational or committed to some fixed price. A rational buyer has a private value and outside option. If the set of buyer values and commitment types is rich and the probability of commitment vanishes, outcomes are partially consistent with the Coase conjecture: the seller chooses a price below the maximum of the lowest outside option and half the lowest value; the buyer immediately accepts or takes his outside option.

Suggested Citation

  • Jack Fanning, 2026. "Outside Options, Reputations, and the Partial Success of the Coase Conjecture," Econometrica, Econometric Society, vol. 94(3), pages 877-910, May.
    • Handle: RePEc:wly:emetrp:v:94:y:2026:i:3:p:877-910
    DOI: 10.3982/ECTA22022
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