Maximal Revenue with Multiple Goods: Nonmonotonicity and Other Observations
AbstractConsider the problem of maximizing the revenue from selling a number of goods to a single buyer. We show that, unlike the case of one good, when the buyer's values for the goods increase the seller's maximal revenue may well decrease. We also provide a characterization of revenue-maximizing mechanisms (more generally, of "seller-favorable" mechanisms) that circumvents nondifferentiability issues. Finally, through simple and transparent examples, we clarify the need for and the use of randomization when maximizing revenue in the multiple-goods versus the one-good case.
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Bibliographic InfoPaper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp630.
Length: 24 pages
Date of creation: Nov 2012
Date of revision:
Other versions of this item:
- Sergiu Hart & Philip J. Reny, 2012. "Maximal Revenue with Multiple Goods: Nonmonotonicity and Other Observations," Levine's Working Paper Archive 786969000000000625, David K. Levine.
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.:
- Manelli, Alejandro M. & Vincent, Daniel R., 2007.
"Multidimensional mechanism design: Revenue maximization and the multiple-good monopoly,"
Journal of Economic Theory,
Elsevier, vol. 137(1), pages 153-185, November.
- Alejandro M. Manelli & Daniel R. Vincent, 2004. "Multidimensional Mechanism Design: Revenue Maximization and the Multiple-Good Monopoly," Working Papers 2004.153, Fondazione Eni Enrico Mattei.
- Gregory Pavlov, 2010.
"Optimal Mechanism for Selling Two Goods,"
UWO Department of Economics Working Papers
20103, University of Western Ontario, Department of Economics.
- Sergiu Hart & Noam Nisan, 2012.
"Approximate Revenue Maximization with Multiple Items,"
Discussion Paper Series
dp606, The Center for the Study of Rationality, Hebrew University, Jerusalem.
- Sergiu Hart & Noam Nisan, 2012. "Approximate Revenue Maximization with Multiple Items," Levine's Working Paper Archive 786969000000000433, David K. Levine.
- Manelli, Alejandro M. & Vincent, Daniel R., 2006. "Bundling as an optimal selling mechanism for a multiple-good monopolist," Journal of Economic Theory, Elsevier, vol. 127(1), pages 1-35, March.
- Thanassoulis, John, 2004. "Haggling over substitutes," Journal of Economic Theory, Elsevier, vol. 117(2), pages 217-245, August.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- âMaximal Revenue with Multiple Goods: Nonmonotonicity and Other Observations,â S. Hart and P. Reny (2013)
by afinetheorem in A Fine Theorem on 2013-11-12 10:57:37
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