On the use of ceiling-price commitments by monopolists

The establishment of an asking, or ceiling price from which reductions can be bargained is a common selling practice, For a monopolist seller of a single object, this article characterizes the best such ceiling price and shows that its use is optimal among all incentive-compatible mechanisms in a class of situations characterized by customers (I) who arrive one at a time and so do not compete with each other directly and (2) who learn their idiosyncratic willingnesses to pay only by incurring idiosyncratic inspection costs.