Smart contracts and the Coase conjecture

Brzustowski, Thomas, Georgiadis Harris, Alkis ORCID: 0009-0000-6351-3805 and Szentes, Balázs (2023) Smart contracts and the Coase conjecture. American Economic Review, 113 (5). 1334 - 1359. ISSN 0002-8282

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Abstract

This paper reconsiders the problem of a durable-good monopolist who cannot make intertemporal commitments. The buyer’s valuation is binary and his private information. The seller has access to dynamic contracts and, in each period, decides whether to deploy the previous period’s contract or to replace it with a new one. The main result of the paper is that the Coase Conjecture fails: the monopolist’s payoff is bounded away from the low valuation irrespective of the discount factor

Item Type:	Article
Official URL:	https://www.aeaweb.org/journals/aer
Additional Information:	© 2023 American Economic Association.
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	D - Microeconomics > D4 - Market Structure and Pricing > D42 - Monopoly D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly; Monopolization Strategies
Date Deposited:	19 Jan 2023 09:42
Last Modified:	12 Dec 2024 03:32
URI:	http://eprints.lse.ac.uk/id/eprint/117950

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