Smart Contracts and the Coase Conjecture

Thomas Brzustowski, Alkis Georgiadis-Harris and Balázs Szentes

American Economic Review, 2023, vol. 113, issue 5, 1334-59

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.

JEL-codes: D42 D82 D86 L12 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1257/aer.20220357

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