Multidimensional screening under nonlinear costs: Limits of standard approach
AbstractWe generalize the usual screening approach and conditions for efficiency-at-the-top and acyclic property from linear to fixed-plus-separable or concave costs and multidimensional commodities. But under non-concave costs, like capacity constraints, an example shows a cycle in the solution graph. The cycle makes the standard screening solution non-implementable and approach inadequate.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 107 (2010)
Issue (Month): 2 (May)
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Web page: http://www.elsevier.com/locate/ecolet
Nonlinear pricing Screening Graphs Capacity constraints Increasing returns;
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