Repeated contracting without commitment

Breig, Zachary

doi:10.1016/j.jet.2022.105514

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2024

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“…It follows that we cannot take limits using the equilibrium outcome in Skreta (2006) to analyze the equilibrium outcomes of the game we study, even after showing that the game ends in finite time. Second, Breig (2022) shows in a binary‐value model with a perishable good that posted prices may not be optimal: Indeed, the seller may benefit from using random delivery contracts.…”

Section: Introductionmentioning

confidence: 99%

Optimal mechanism for the sale of a durable good

Doval,

Skreta

2024

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A buyer wishes to purchase a durable good from a seller who in each period chooses a mechanism under limited commitment. The buyer's value is binary and fully persistent. We show that posted prices implement all equilibrium outcomes of an infinite‐horizon, mechanism‐selection game. Despite being able to choose mechanisms, the seller can do no better and no worse than if he chose prices in each period, so that he is subject to Coase's conjecture. Our analysis marries insights from information and mechanism design with those from the literature on durable goods. We do so by relying on the revelation principle in Doval and Skreta (2022).

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Section: Introductionmentioning

confidence: 99%

Optimal mechanism for the sale of a durable good

Doval,

Skreta

2024

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Repeated contracting without commitment

Cited by 1 publication

References 19 publications

Optimal mechanism for the sale of a durable good

Optimal mechanism for the sale of a durable good

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