  A monopolist sells items repeatedly over time to a consumer with persistent
private information. The seller has limited commitment: she cannot commit to a
long-term contract but always has the option to commit to posted prices for
unsold items. We show that a static price path is the unique equilibrium
outcome; that is, the seller cannot do better than simply posting the monopoly
price for each item. The ratchet effect eliminates price discrimination gains
for any degree of persistence of the private information. The paper also shows
how dynamic mechanism design can help derive new results in games with limited
commitment.
