On the Optimality of Pure Bundling for a Monopolist

Menicucci, Domenico, Hurkens, Sjaak and Jeon, Doh-Shin (2014) On the Optimality of Pure Bundling for a Monopolist. , Toulouse

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Official URL: http://tse-fr.eu/pub/28352

Abstract

This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if each buyer’s type has a non-negative virtual valuation for each object, then the optimal price schedule is such that the objects are sold only in a bundle; weaker conditions suffice if valuations are independently and identically distributed. Under somewhat stronger conditions, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.

Item Type: Monograph (Working Paper)
Language: English
Date: 7 July 2014
Place of Publication: Toulouse
Uncontrolled Keywords: Monopoly Pricing, Price discrimination, Multi-dimensional mechanism design, Pure Bundling
JEL codes: D42 - Monopoly
D82 - Asymmetric and Private Information
L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 10 Jul 2014 17:09
Last Modified: 13 Nov 2018 15:25
OAI ID: oai:tse-fr.eu:28352
URI: http://publications.ut-capitole.fr/id/eprint/16222

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