Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113779
Authors: 
Kos, Nenad
Messner, Matthias
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5443
Abstract: 
We study optimal selling strategies of a seller who is poorly informed about the buyer’s value for the object. When the maxmin seller only knows that the mean of the distribution of the buyer’s valuations belongs to some interval then nature can keep him to payoff zero no matter how much information the seller has about the mean. However, when the seller has information about the mean and the variance, or the mean and the upper bound of the support, the seller optimally commits to a randomization over prices and obtains a strictly positive payoff. In such a case additional information about the mean and/or the variance affects his payoff.
Subjects: 
optimal mechanism design
robustness
incentive compatibility
individual rationality
ambiguity aversion
JEL: 
C72
D44
D82
Document Type: 
Working Paper

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