Repeated contracting without commitment

Zachary Breig

Journal of Economic Theory, 2022, vol. 204, issue C

Abstract: I study a dynamic model of monopoly sales in which a monopolist without commitment power interacts with a consumer whose valuation is private. I characterize equilibria of this game and show how the seller's strategy varies with initial beliefs. I find that the seller's payoffs under spot contracting can be higher than under commitment with renegotiation and that random delivery contracts can improve payoffs beyond posted prices.

Keywords: Commitment; Mechanism design; Posted prices; Renegotiation; Spot contracting (search for similar items in EconPapers)
JEL-codes: D42 D82 D86 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:204:y:2022:i:c:s0022053122001041

DOI: 10.1016/j.jet.2022.105514

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