Abstract
One of the most famous and outstanding formalizations of the Coase Conjecture is that by Gul, Sonnenschein, and Wilson (1986). A peculiarity of their model — as well as all other examinations of the Coase Conjecture of which I am aware, including that by Coase himself — is that it assumes that the monopolist and customers have the same discount rate. I re-examine their model, while relaxing this restriction. Gul, Sonnenschein, and Wilson show that, if the (common) discount rate of the monopolist and customers approaches one, then the Coase Conjecture follows. I show that one only needs the discount rate of the customers to approach one for this to be true. I also show a second result: If the customers’ discount rate is fixed at a value less than one while the monopolist’s discount rate approaches one, then the Coase Conjecture is guaranteed not to follow.
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