Coasian Dynamics with Set-Valued Allocative Efficiency: Information Goods

Zihao Li

Papers from arXiv.org

Abstract: This paper studies a dynamic monopoly with limited commitment in which allocative efficiency is set-valued. The environment is characterized by two structural features: free disposability on the buyer side and zero marginal cost on the seller side along the allocation margin. We show that when parties are sufficiently patient, the set of equilibrium seller payoffs contains an interval ranging from the lowest-type buyer's efficient surplus to a constrained static monopoly benchmark, subject to the requirement that the lowest-type buyer receives an efficient allocation with probability one. When efficiency is set-valued rather than single-valued, Coasian discipline operates only through an allocative constraint on the lowest type and does not generally pin down a unique equilibrium path. We interpret the results through the lens of information goods, which offer a clean benchmark in which allocative efficiency is set-valued.

Date: 2025-07, Revised 2026-01
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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