Regret in durable-good monopoly

Rumen Kostadinov ()
Additional contact information
Rumen Kostadinov: Department of Economics, McMaster University

Theoretical Economics, Forthcoming

Abstract: I study a dynamic model of durable-good monopoly where the seller minimises lifetime regret against the worst-case type of buyer. The optimal mechanism is time-consistent: at no point can the seller benefit from replacing it with another mechanism. Despite this, the optimal mechanism cannot be supported in an equilibrium without commitment. This is because the seller's regret is endogenously determined by the best counterfactual payoffs he can obtain against every type, and these payoffs vary with his commitment power. When the seller lacks commitment the good may not be sold to all types. However, in the limit as offers become frequent the good is sold immediately at a price equal to the lowest buyer value.

Keywords: Durable-good monopoly; Coase conjecture; regret (search for similar items in EconPapers)
JEL-codes: C73 C78 (search for similar items in EconPapers)
Date: 2025-12-08
References: Add references at CitEc
Citations:

Downloads: (external link)
http://econtheory.org/ojs/index.php/te/article/viewForthcomingFile/6066/43757/1 Working paper version. Paper will be copyedited and typeset before publication. (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:the:publsh:6066

Access Statistics for this article

Theoretical Economics is currently edited by Federico Echenique, Mira Frick, Pablo Kurlat, Juuso Toikka, Rakesh Vohra

More articles in Theoretical Economics from Econometric Society
Bibliographic data for series maintained by Editor Theoretical Economics ( this e-mail address is bad, please contact ).