More Goods Means More Commitment

Abstract

A seller without commitment to future offers interacts with a buyer over time. There are many goods for sale, with the buyer's value for a bundle the sum of each bundled good's value. Each date, the seller jointly announces a menu of subsets of the remaining inventory and current prices, and the buyer may purchase one of the offered subsets or wait. In the next period, the seller may again offer any menu of the remaining goods. Neither buyer nor seller can commit to future behavior. I show that as players become maximally patient, if scope increases sufficiently fast compared to patience, revenue per good converges to expected value per good and buyer utility per good converges to zero, in any equilibrium. But if patience instead grows sufficiently fast compared to scope, seller revenue per good converges to the lowest possible value and the buyer captures all remaining surplus, in any equilibrium.