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Selling Complementary Goods: Information and Products

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  • Suehyun Kwon

Abstract

This paper studies optimal mechanisms for selling complementary goods sequentially. The seller starts with private information, has limited commitment and offers in the first period a menu of information structures on the value of the second-period product. Fully revealing the seller type in the first period makes the second period a standard adverse selection problem, and fully revealing the buyer type in the first period makes the second period an information design problem. Among properties of equilibria, all types of seller must pool in every equilibrium if certain first-order stochastic dominance and independence conditions are satisfied.

Suggested Citation

  • Suehyun Kwon, 2018. "Selling Complementary Goods: Information and Products," CESifo Working Paper Series 7394, CESifo.
    • Handle: RePEc:ces:ceswps:_7394
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    References listed on IDEAS

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    Keywords

    information design; dynamic informed-principal problem; interdependent values; limited commitment; Myerson-Satterthwaite;
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