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A closer look at two conjectures about irregular marginal revenue

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  • Maslov, Alexander
  • Noiset, Luc
  • Schwartz, Jesse A.

Abstract

A common assumption in models where buyers have private information is for the buyers to draw their private values from distribution F with density f. Optimal mechanisms differ depending on whether the marginal revenue (buyer’s virtual valuation) is increasing (in which case F is said to be regular) or not increasing (in which case F is said to be irregular). This note examines two conjectures about sufficient conditions for irregularity made in the literature—made but not proven. We develop counterexamples to show that these conjectures are false, thereby reducing the set of distributions previously thought to be irregular.

Suggested Citation

  • Maslov, Alexander & Noiset, Luc & Schwartz, Jesse A., 2022. "A closer look at two conjectures about irregular marginal revenue," Economics Letters, Elsevier, vol. 218(C).
    • Handle: RePEc:eee:ecolet:v:218:y:2022:i:c:s0165176522002518
    DOI: 10.1016/j.econlet.2022.110728
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    References listed on IDEAS

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    More about this item

    Keywords

    Irregularity; Marginal revenue; Regularity; Virtual valuation;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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