Revenue Maximizing Mechanisms with Strategic Customers and Unknown, Markovian Demand

34 Pages Posted: 20 Nov 2014 Last revised: 18 Nov 2016

See all articles by Alex Gershkov

Alex Gershkov

Hebrew University of Jerusalem

Benny Moldovanu

University of Bonn - Chair of Economic Theory II; Centre for Economic Policy Research (CEPR)

Philipp Strack

Yale, Department of Economics

Date Written: November 16, 2016

Abstract

A designer allocates several indivisible objects to a stream of randomly arriving agents. The long-lived agents are privately informed about their value for an object, and about their arrival time to the market. The designer learns about future arrivals from past arrivals, while agents strategically choose when to make themselves available for trade. We characterize revenue maximizing direct mechanism and offer a simple indirect mechanism that captures a substantial part of the revenues of the revenue maximizing mechanism.

Keywords: Revenue Management, Strategic Buyers, Name Your Own Price, Mechanism Design

Suggested Citation

Gershkov, Alex and Moldovanu, Benny and Strack, Philipp, Revenue Maximizing Mechanisms with Strategic Customers and Unknown, Markovian Demand (November 16, 2016). Available at SSRN: https://ssrn.com/abstract=2527653 or http://dx.doi.org/10.2139/ssrn.2527653

Alex Gershkov (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, IL Jerusalem 91905
Israel

HOME PAGE: http://pluto.huji.ac.il/~alexg/

Benny Moldovanu

University of Bonn - Chair of Economic Theory II ( email )

Lennestrasse 37
53113 Bonn
Germany
+49 228 736395 (Phone)
+49 228 737940 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Philipp Strack

Yale, Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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