Durable-goods monopoly with stochastic values

I analyze a durable-goods model that allows consumers' values to vary over time. The optimal mechanism for a monopolist is computed and compared to bo th the sales and leasing equilibria. I show that sales may implement the op timal strategy, and that the dominance of leasing over sales is not necessa rily true. This implication is consistent with the prevalence of simple sal es contracts in many markets.