Coasian Dynamics with Free Disposability and Zero Marginal Cost: Information Goods
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arXiv
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| Format: | Preprint |
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2025
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| _version_ | 1866915823903309824 |
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| author | Li, Zihao |
| author_facet | Li, Zihao |
| contents | This paper studies a durable goods monopoly with multiple provision levels, free disposability, and zero marginal cost. We establish a Folk-Theorem-type result: as parties become sufficiently patient, equilibrium seller payoffs contains an interval bounded below by the lowest-type buyer's efficient surplus and above by the maximal static payoff under incentive-compatible mechanisms guaranteeing that type efficient provision. This multiplicity arises because free disposability and zero marginal cost render the efficient provision level non-unique. Our analysis demonstrates how structural features common in information goods can undermine the Coase conjecture. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2507_13137 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Coasian Dynamics with Free Disposability and Zero Marginal Cost: Information Goods Li, Zihao Theoretical Economics This paper studies a durable goods monopoly with multiple provision levels, free disposability, and zero marginal cost. We establish a Folk-Theorem-type result: as parties become sufficiently patient, equilibrium seller payoffs contains an interval bounded below by the lowest-type buyer's efficient surplus and above by the maximal static payoff under incentive-compatible mechanisms guaranteeing that type efficient provision. This multiplicity arises because free disposability and zero marginal cost render the efficient provision level non-unique. Our analysis demonstrates how structural features common in information goods can undermine the Coase conjecture. |
| title | Coasian Dynamics with Free Disposability and Zero Marginal Cost: Information Goods |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2507.13137 |