Equilibrium partner switching in a bargaining model with asymmetric information

We study a model in which the seller of an indivisible object facts two pot ential buyers and makes an offer to either of them in each period. We find that the seller's ability to extract surplus from them depends crucially on the value of the cost of switching from one buyer to the: next. If the sel ler is pessimistic about the buyers' valuations and there is a switching co st, however small, then the market is a natural bilateral monopoly: the sec ond buyer is never called on. If the switching cost is zero, or if the sell er is optimistic, then switching, and possibly recall of the original buyer , may occur.