2022/02/09 by Jonathan Libgober, Li, Zihao, Libgober, Jonathan +2 · 1 citation
Business, Management and Accounting · Decision Sciences · #Digital Platforms and Economics #FOS: Economics and business #Game Theory and Applications #Innovation Diffusion and Forecasting #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2202.04616
openalex publication_date 2022/02/09 · openalex created_date 2022/05/05 · openalex updated_date 2026/07/28
A seller sells an object over time but is uncertain how the buyer learns their willingness-to-pay. We consider informational robustness under limited commitment, where the seller offers a price each period to maximize expected continuation profit against worst-case learning. Our formulation considers the worst case sequentially. We characterize an essentially unique equilibrium under general conditions. We further show that, under mild conditions on the prior distribution, the equilibrium profit coincides exactly with the profit guaranteed by the equilibrium price path even under arbitrary (unrestricted) learning processes.