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Optimal Selling Mechanisms under Imperfect Commitment

Juan Beccuti ()

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: This paper studies the optimal mechanisms for a seller (she) who puts up for sale one individual unit per period to a single buyer (he) in a two-period game. The buyer's willingness to pay remains constant over time and is his private information. The seller can commit to the mechanism for the first period but not to the second one. In this setting, she cannot achieve greater payoffs than those obtained by posting a price in each period. However, price posting is not optimal if he is sufficiently impatient relative to her. It is also proved that a mechanism la Goethe (see Moldovanu and Tieztel 1998) is almost optimal.

Keywords: asymmetric information; imperfect commitment; dynamics; mechanism design; non-optimality of posting prices (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-cta and nep-mic
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Citations: View citations in EconPapers (1)

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