A direct proof of the Coase conjecture

This paper is aimed at providing a direct proof of the Cease conjecture when the existence of a second-hand market ensures the possibility of arbitrage for the consumers; in this context, the problem is stated as an optimal control problem. The commitment strategy and the no-commitment strategy of the monopolist are respectively found. The latter which is analysed by dynamic programming gives the Cease conjecture result. (C) 1998 Elsevier Science S.A.