Optimal Mechanism for the Sale of a Durable Good with Vasiliki Skreta
This seminar will take place on Zoom
We show that posted prices are the optimal mechanism to sell a durable good to a privately informed buyer when the seller has limited commitment in an infinite horizon setting. We provide a methodology for mechanism design with limited commitment and transferable utility. Whereas in the case of commitment, subject to the buyer’s truthtelling and participation constraints, the seller’s problem is a decision problem, in the case of limited commitment, the seller’s problem corresponds to an intrapersonal game, where different “incarnations” of the seller represent the different beliefs he may have about the buyer’s valuation.

Link to paper: arxiv.org/abs/1904.07456

Please sign up for meetings here: docs.google.com/spreadsheets/d/1oOdNFPS0gB3nsREcYq8_0hSXqAZ6VjlE-MozGuzhyCQ/edit#gid=0
Date: 1 May 2020, 14:15
Venue: Venue to be announced
Speaker: Laura Doval (California Institute of Technology)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Melis Clark