We study optimal dynamic selling mechanisms in a two-stage model where the buyer can search for a better price at the second stage. When this outside price is public, the optimal selling mechanism takes the form of a fixed first-stage price with price matching in the second stage. In contrast,...

We introduce a novel stochastic control model for the problem of a service firm interacting over time with one of its customers. The firm has two service modes available, which differ in their expected reward rates as well as their volatilities (risk). The firm's objective is to maximize the...