American Economic Review Vol. 113 No. 5 2023

Smart Contracts and the Coase Conjecture

Thomas Brzustowski¹; Alkis Georgiadis-Harris²; Balázs Szentes¹

¹ Department of Economics, London School of Economics (email: ) · ² Department of Economics, University of Bonn (email: )

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 monopo-list’s payoff is bounded away from the low valuation irrespective of the discount factor.

DOI

10.1257/aer.20220357

Volume

113

Issue

5

Pages

1334-1359

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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