Alkis Georgiadis-Harris (University of Bonn) 19.10.2022

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 deploy the previous period’s contract or to replace it with a new one. Our main result is that the Coase Conjecture fails: the monopolist’s payoff is bounded away from the low valuation irrespective of the discount factor.