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Dynamic Screening in a Long Term Relationship

dc.contributor.advisor Taylor, Curtis
dc.contributor.author Boleslavsky, Raphael
dc.date.accessioned 2009-05-01T18:26:47Z
dc.date.available 2009-05-01T18:26:47Z
dc.date.issued 2009
dc.identifier.uri https://hdl.handle.net/10161/1127
dc.description.abstract <p>I characterize optimal long term contracts offered by a monopolist to a buyer whose private valuation evolves according to a branching process with privately known transition probability. The optimal contract can be implemented in a simple way, and presents the buyer with a tradeoff between a high initial fixed fee and low future prices. In an interaction with a long time horizon, the relationship will terminate prematurely with probability close to one. Optimal mechanisms are quite different from models in which the transition probability is known, and the buyer's private information is his initial valuation. Optimal contracts resemble the structure of term life insurance contracts, and have features similar to actual interactions between retailers and suppliers.</p>
dc.format.extent 836332 bytes
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.subject Economics, Theory
dc.subject Dynamic Mechanism Design
dc.subject Long Term Contract
dc.subject Mechanism Design
dc.title Dynamic Screening in a Long Term Relationship
dc.type Dissertation
dc.department Economics


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