This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

We study the problem of a monopolist who faces consumers with heterogeneous tastes a la Hotelling (1929). The monopolist first designs a product (positions herself) and then chooses the price. The standard monopoly model is nested as a special case with a fixed position. To determine the range...