Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/228886 
Year of Publication: 
2019
Series/Report no.: 
Discussion Papers No. 19-08
Publisher: 
University of Bern, Department of Economics, Bern
Abstract: 
This paper proposes a mechanism design approach, capable of endogenizing a monopolist's choice between selling and renting in a non-anonymous durable goods setting with short-term commitment. Allowing for mechanisms that determine the good's allocation not only at the beginning but also at the end of a given period, we show that the profit-maximizing mechanism features screening by mode of trade. By selling to high types while renting to low types, the monopolist overcomes the obstacles encountered by intertemporal price discrimination and induces immediate separation of types for arbitrary low priors.
Subjects: 
Durable goods
Dynamic mechanism design
Coase problem
Ratchet effect
Screening
JEL: 
D82
D86
D42
Document Type: 
Working Paper

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