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Coasian Dynamics with Free Disposability and Zero Marginal Cost: Information Goods

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  • Zihao Li

Abstract

This paper studies a durable goods monopoly with multiple provision levels, free disposability, and zero marginal cost. We establish a Folk-Theorem-type result: as parties become sufficiently patient, equilibrium seller payoffs contains an interval bounded below by the lowest-type buyer's efficient surplus and above by the maximal static payoff under incentive-compatible mechanisms guaranteeing that type efficient provision. This multiplicity arises because free disposability and zero marginal cost render the efficient provision level non-unique. Our analysis demonstrates how structural features common in information goods can undermine the Coase conjecture.

Suggested Citation

  • Zihao Li, 2025. "Coasian Dynamics with Free Disposability and Zero Marginal Cost: Information Goods," Papers 2507.13137, arXiv.org, revised Feb 2026.
    • Handle: RePEc:arx:papers:2507.13137
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    References listed on IDEAS

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