Premium
Durable‐Goods Monopoly with Privately Known Impatience: A Theoretical and Experimental Study
Author(s) -
Güth Werner,
Kröger Sabine,
Normann HansTheo
Publication year - 2004
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbh070
Subject(s) - monopoly , durable good , economics , microeconomics , value (mathematics) , private information retrieval , mathematical economics , computer science , computer security , machine learning
We analyze a durable‐goods monopoly selling a single unit of a good to a buyer whose value of the good is private information. The discount factors of the buyer and the seller may differ and are also privately known. We derive the closed‐form solution of a two‐period game and compare it to the behavior observed in experiments. The data are to a large extent consistent with the predictions.