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Multi-Dimensional Screening: Buyer-Optimal Learning and Informational Robustness

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  • Rahul Deb
  • Anne-Katrin Roesler

Abstract

A monopolist seller of multiple goods screens a buyer whose type is initially unknown to both but drawn from a commonly known distribution. The buyer privately learns about his type via a signal. We derive the seller's optimal mechanism in two different information environments. We begin by deriving the buyer-optimal outcome. Here, an information designer first selects a signal, and then the seller chooses an optimal mechanism in response; the designer's objective is to maximize consumer surplus. Then, we derive the optimal informationally robust mechanism. In this case, the seller first chooses the mechanism, and then nature picks the signal that minimizes the seller's profits. We derive the relation between both problems and show that the optimal mechanism in both cases takes the form of pure bundling.

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  • Rahul Deb & Anne-Katrin Roesler, 2021. "Multi-Dimensional Screening: Buyer-Optimal Learning and Informational Robustness," Papers 2105.12304, arXiv.org.
  • Handle: RePEc:arx:papers:2105.12304
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    References listed on IDEAS

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    Cited by:

    1. Shota Ichihashi & Alex Smolin, 2023. "Buyer-Optimal Algorithmic Consumption," Papers 2309.12122, arXiv.org, revised Oct 2023.
    2. Frank Yang, 2021. "Costly Multidimensional Screening," Papers 2109.00487, arXiv.org, revised Aug 2022.
    3. Sushil Bikhchandani & Debasis Mishra, 2022. "Rank-Preserving Multidimensional Mechanisms," Papers 2209.10137, arXiv.org, revised Feb 2024.

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