Three Principles of Competitive Nonlinear Pricing
AbstractWe make three contributions to the theory of contracting under asymmetric information. First, we establish a competitive analog to the revelation principle which we call the implementation principle. This principle provides a complete characterization of all incentive compatible, indirect contracting mechanisms in terms of contract catalogs, and allows us to conclude that in competitive contracting situations, firms in choosing their contracting strategies can restrict attention to contract catalogs. Second, we establish a competitive taxation principle. This principle, a refinement of the implementation principle, provides a complete characterization of all implementable nonlinear pricing schedules in terms of product-price catalogs and allows us to reduce any game played over nonlinear pricing schedules to a strategically equivalent game played over product price catalogs. Third, using the existence of Nash equilibria in discontinuous games, we demonstrate the existence of Nash equilibria for the mixed extension of the nonlinear pricing game.
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Bibliographic InfoPaper provided by Graduate School of Economics, Getulio Vargas Foundation (Brazil) in its series Economics Working Papers (Ensaios Economicos da EPGE) with number 442.
Date of creation: 01 Mar 2002
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Other versions of this item:
- Frank Page & Paulo Monteiro, 2001. "Three Principles of Competitive Nonlinear Pricing," Economics Bulletin, AccessEcon, vol. 28(11), pages A0.
- Page, Frank Jr. & Monteiro, Paulo K., 2003. "Three principles of competitive nonlinear pricing," Journal of Mathematical Economics, Elsevier, vol. 39(1-2), pages 63-109, February.
- Page, F.H.Jr. & Monteiro, P.K., 2001. "Three Principles of Competitive Nonlinear Pricing," The Warwick Economics Research Paper Series (TWERPS) 592, University of Warwick, Department of Economics.
- Frank H. Page & Paulo Klinger Monteiro, 2002. "Three principles of competitive nonlinear pricing," Game Theory and Information 0204001, EconWPA.
- D4 - Microeconomics - - Market Structure and 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.:
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- repec:hal:journl:halshs-00195526 is not listed on IDEAS
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