This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if the virtual valuation for each object is non-negative for all possible types, then the optimal price schedule is such that the objects are sold only in a bundle. Under an additional regularity condition, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.
On the optimality of pure bundling for a monopolist / Menicucci, Domenico; Jeon, Doh-Shin; Hurkens, Sjaak. - In: JOURNAL OF MATHEMATICAL ECONOMICS. - ISSN 0304-4068. - STAMPA. - 60:(2015), pp. 33-42. [10.1016/j.jmateco.2015.06.011]
On the optimality of pure bundling for a monopolist
MENICUCCI, DOMENICO;
2015
Abstract
This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if the virtual valuation for each object is non-negative for all possible types, then the optimal price schedule is such that the objects are sold only in a bundle. Under an additional regularity condition, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.File | Dimensione | Formato | |
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