TY  - RPRT
CY  - Toulouse
ID  - publications25640
UR  - http://tse-fr.eu/pub/31911
A1  - Garrett, Daniel F.
Y1  - 2017/06//
N2  - We study the optimal mechanism in a dynamic sales relationship where the buyerís arrival date is uncertain, and where his value changes stochastically over time. The buyerís arrival date is the Örst date at which contracting is feasible and is his private information. To induce immediate participation, the buyer is granted positive expected rents even if his value at arrival is the lowest possible. The buyer is punished for arriving late; i.e., he expects to earn less of the surplus. Optimal allocations for a late arriver are also further distorted below Örst-best levels. Conditions are provided under which allocations converge to the e¢ cient ones long enough after contracting, and this convergence occurs irrespective of the time the contract is initially agreed (put di§erently, the so-called "principle of vanishing distortions" introduced by Battaglini (2005) continues to apply irrespective of the buyerís arrival date).
PB  - TSE Working Paper
T3  - TSE Working Paper
KW  - dynamic mechanism design
KW  - dynamic arrivals
KW  - stochastic process
M1  - working_paper
TI  - Dynamic Mechanism Design
AV  - public
EP  - 31
ER  -