In a market with repeated sales of a single item to a single buyer, prior work has established the\u00a0existence of a zero revenue perfect Bayesian equilibrium in the absence of a commitment device\u00a0for the seller. This counter-intuitive outcome is the result of strategic purchasing decisions, where\u00a0the buyer worries that the seller will update future prices in response to past purchasing behavior.\u00a0We first show that in fact almost any revenue can be achieved in equilibrium, but the zero revenue\u00a0equilibrium uniquely survives natural refinements. This establishes that single buyer markets\u00a0without commitment are subject to market failure. However, our main result shows that this market\u00a0failure depends crucially on the assumption of a single buyer. If there are multiple buyers, the\u00a0seller can approximate the revenue that is possible with commitment. We construct an intuitive\u00a0equilibrium for multiple buyers that survives our refinements, in which the seller learns from past\u00a0purchasing behavior and obtains a constant factor of the per-round Myerson optimal revenue.\u00a0Moreover, we describe a simple and computationally tractable pricing algorithm for the seller that\u00a0achieves this approximation when buyers best-respond.<\/p>\n","protected":false},"excerpt":{"rendered":"
In a market with repeated sales of a single item to a single buyer, prior work has established the\u00a0existence of a zero revenue perfect Bayesian equilibrium in the absence of a commitment device\u00a0for the seller. This counter-intuitive outcome is the result of strategic purchasing decisions, where\u00a0the buyer worries that the seller will update future prices […]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"msr-url-field":"","msr-podcast-episode":"","msrModifiedDate":"","msrModifiedDateEnabled":false,"ep_exclude_from_search":false,"_classifai_error":"","msr-author-ordering":null,"msr_publishername":"","msr_publisher_other":"","msr_booktitle":"","msr_chapter":"","msr_edition":"","msr_editors":"","msr_how_published":"","msr_isbn":"","msr_issue":"","msr_journal":"","msr_number":"","msr_organization":"","msr_pages_string":"","msr_page_range_start":"","msr_page_range_end":"","msr_series":"","msr_volume":"","msr_copyright":"","msr_conference_name":"EC'17, Cambridge, MA, 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