Outside Options, Reputations, and the Partial Success of the Coase Conjecture
Abstract
A buyer and seller bargain in continuous time over a good. Bargainers can be rational or committed to some fixed price. A rational buyer has a private value and outside option. If the set of buyer values and commitment types is rich and the probability of commitment vanishes, outcomes are partially consistent with the Coase conjecture: the seller chooses a price below the maximum of the lowest outside option and half the lowest value; the buyer immediately accepts or takes his outside option.
Fields of Study & Subjects
Auction Theory and Applications
Game Theory and Applications
Game Theory and Voting Systems
Publication details
- Journal / source
- Econometrica
- Publisher
- The Econometric Society
- Volume
- 94
- Issue
- 3
- Pages
- 877–910
- Publication date
- 1 January 2026
- Language
- EN