[tskj]

Idk the obvious answer seems to be that buying now vs buying later isn't the same? Seems like a preposterous assumption; or rather an assumption that obviously never holds for any market ever so this theory is unfalsifiable by empirical data (and also irrelevant to the real world).

[0zer0]

This.

The full set of constraints (monopoly, durability, constant MC, timelessness) can hardly ever be fulfilled. So it is not falsifiable by empirical data.

But nobody has questioned the logic conjecture itself here, even the article doesn't try. It seems pretty plausible, doesn't it?

[tskj]

I agree it does seem pretty plausible as some kind of iterated / timeless theory divorced from reality, but especially the assumption that time is irrelevant to the buyer seems completely fanciful. I am usually all for theories that make idealized assumptions and think there's merit to approximations, but this is so egregious--there will never be any market or situation that is anywhere close; and the theory completely breaks down if the assumptions aren't utterly fulfilled. That makes it not even of academic interest, it's completely useless even as a theory.

[zwaps]

Obviously the theory is decades old. I think nowadays a Game Theorist would not go and claim that the fixed-point convergence is an actual market process with consumers and monopolists trying to outsmart each other in some kind of bizarro bazar game.

An equilibrium for a given game is - depending on the equilibrium concept (bummer, even more conditions) - is a stable outcome of some sort with usually no claims as to how it would actually be reached.

By that, you can already see that this is not really an actual theory of an empiric situation, but rather a mathematical model of a certain solution structure.

If you were to write this paper today as an economist and your goal was to claim that is actually, really holds in reality, then you'd not only have to produce the theory but you'd also have to build some sort of empirical model that you can estimate with somewhat plausible identification conditions and structure, or be able to show it in a (pseudo-)experiment setup that is believable enough. Suffice to say that there are very few such claims made on reality in modern microeconomics (that is to say, Game Theory by and large)

As it turns out, these sort of mathematical models have quite a bit of value in a normative setup, say if you go and design a market or an auction. Less so as a theory to explain all of reality.

I think in Coase's time, it was easier to write a 6 page paper from your bathtub and claim something about the world. Wasn't there an xkcd comic like this?