Imperfect durability and the Coase conjecture

• 成果类型: Article
• 署名作者: Deneckere, Raymond; Liang, Meng-Yu
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Academia Sinica - Taiwan
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.0741-6261.2008.00001.x
• 发表日期: 2008
• 页码: 1-19
• 关键词: durable good monopolies; stationary equilibrium; adverse-selection; rational-expectations; goods monopoly; MARKETS; MODEL; depreciation

摘要

This article considers a market served by a monopolist who sells a durable good that depreciates stochastically over time. We show that there exist three types of stationary equilibria: a Coase Conjecture equilibrium, a monopoly equilibrium, and a reputational equilibrium. When the depreciation rate is low, the Coase Conjecture equilibrium is the unique equilibrium. For intermediate values of the depreciation rate, all three equilibrium types coexist. When the depreciation rate is high, the monopoly equilibrium is the unique equilibrium. Consequently, when selling a good of sufficiently low durability, the monopolist does not lose any of her monopoly power. Furthermore, the steady-state output in the reputational equilibrium falls below the monopoly quantity. Hence, in durable goods markets, welfare losses due to monopoly power may be larger than in markets for perishables.