We present two information-based rationales for why sellers of returnable goods tend to offer refunds in excess of the salvage value of the good. Both explanations require at least the potential presence of consumers who can choose to learn their values for the good prior to purchasing.

We present a model of monopoly provision of money-back warranties. A buyer values an object more than its seller. They are both risk neutral and initially have no private information. The buyer can, however, acquire information and learn his true valuation for the object. Information acquisition...

We examine an economy in which the cost of consuming some goods can be reduced by making commitments to consumption levels that do not vary across states. For example, moral hazard and matching considerations may make it cheaper to produce housing services via owner-occupied than rented housing,...