This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 104 No. 2 (February 2014)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Outside Options and the Failure of the Coase Conjecture

Article Citation

Board, Simon, and Marek Pycia. 2014. "Outside Options and the Failure of the Coase Conjecture." American Economic Review, 104(2): 656-71.

DOI: 10.1257/aer.104.2.656

Abstract

A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. Each period the buyer can also exercise an outside option, abandoning their search or moving on to another seller. We show there is a unique equilibrium in which the seller charges a constant price in every period equal to the monopoly price, contravening the Coase conjecture. We then embed the singleseller model into a search framework and show the result provides a foundation for the usual "no haggling" assumption.

Article Full-Text Access

Full-text Article

Additional Materials

Authors

Board, Simon (UCLA)
Pycia, Marek (UCLA)

JEL Classifications

C78: Bargaining Theory; Matching Theory
D42: Market Structure and Pricing: Monopoly
D43: Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
L12: Monopoly; Monopolization Strategies
L13: Oligopoly and Other Imperfect Markets


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us