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Smart Contracts and the Coase Conjecture

Resource type
Authors/contributors
Title
Smart Contracts and the Coase Conjecture
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.
Publication
American Economic Review
Volume
113
Issue
5
Pages
1334-59
Date
2023-05
Citation
Brzustowski, T., Georgiadis-Harris, A., & Szentes, B. (2023). Smart Contracts and the Coase Conjecture. American Economic Review, 113, 1334–1359.
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