The Coase Conjecture
Updated 2026-08-08
INTRODUCTION
English translation pending.
CORE DEFINITION
Proposed by Ronald Coase. A monopolist selling a durable good competes with its own future self: buyers know the seller will want to keep selling, so they wait for lower prices. Anticipating this, the monopolist must cut prices faster, and in the limiting case of continuous trading and patient buyers the price falls to marginal cost immediately, eliminating monopoly profit. Durability itself destroys pricing power.
SCAFFOLDING EFFECT
Reduce cognitive load
- Test pricing power: ask whether customers can profit by waiting for your next price cut - Restructure the offer: convert a durable sale into a subscription or lease to restore pricing power - Plan releases: stagger versions so buyers cannot simply wait for the final markdown
Anchor fast decisions
Each period the seller wants to sell more, and each cut attracts the remaining buyers. Buyers who anticipate this sequence delay purchase, which shrinks current demand and forces an even deeper cut. The seller's own future incentives thus compete with its present self, and where buyers are patient and trading frequent, price collapses toward marginal cost before any profit is captured.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Coase_conjectureverified
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