On the strategic use of risk and undesirable goods in multidimensional screening
AbstractA monopolist sells goods possibly with a characteristic consumers dislike (for instance, he sells random goods to risk averse agents), which does not affect the production costs. We investigate the question whether using undesirable goods is profitable to the seller. We prove that in general this may be the case, depending somehow on the correlation between agent types and aversion. This is due to screening effects that outperform this aversion. We analyze, in a continuous framework, several multidimensional cases.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 47 (2011)
Issue (Month): 6 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/jmateco
Principal–agent problem; Adverse selection; Calculus of variations; Nonlinear pricing;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Armstrong, Mark, 1996. "Multiproduct Nonlinear Pricing," Econometrica, Econometric Society, Econometric Society, vol. 64(1), pages 51-75, January.
- Maskin, Eric S & Riley, John G, 1984.
"Optimal Auctions with Risk Averse Buyers,"
Econometrica, Econometric Society,
Econometric Society, vol. 52(6), pages 1473-1518, November.
- J. Riley & E. Maskin, 1981. "Optimal Auctions with Risk Averse Buyers," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 311, Massachusetts Institute of Technology (MIT), Department of Economics.
- repec:att:wimass:9508 is not listed on IDEAS
- McAfee, R. Preston, 2007.
"Pricing Damaged Goods,"
Economics Discussion Papers, Kiel Institute for the World Economy
2007-2, Kiel Institute for the World Economy.
- McAfee, R. Preston, 2007. "Pricing Damaged Goods," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, Kiel Institute for the World Economy, vol. 1(1), pages 1-19.
- Eric Maskin & John Riley, 1984. "Monopoly with Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 171-196, Summer.
- Patrick Bolton & Mathias Dewatripont, 2005.
MIT Press Books, The MIT Press,
The MIT Press,
edition 1, volume 1, number 0262025760, December.
- Mathias Dewatripont & Patrick Bolton, 2005. "Contract theory," ULB Institutional Repository, ULB -- Universite Libre de Bruxelles 2013/9543, ULB -- Universite Libre de Bruxelles.
- Richard Arnott & Joseph E Stiglitz, 2010.
"Randomization with Asymmetric Information,"
Levine's Working Paper Archive
2054, David K. Levine.
- Raymond J. Deneckere & R. Preston McAfee, 1996.
Journal of Economics & Management Strategy, Wiley Blackwell,
Wiley Blackwell, vol. 5(2), pages 149-174, 06.
- Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, Econometric Society, vol. 66(4), pages 783-826, July.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, Elsevier, vol. 18(2), pages 301-317, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.