The Coase Problem: A Transformation of the Usual Utility Function

Given that demand for durable goods is not constant over time, we propose in this article a transformation of the utility function, which accounts for discrete time and for the effect of different levels of income in the utility of buying. With this, the original Coase paradox will collapse. The smaller the difference of the reservation prices between high income level and low income level consumers, the higher the probability of marginal cost pricing in the present.