Self-Selection Under Non-Ordered Valuations: Type-Splitting, Envy-Cycles, Rationing And Efficiency
AbstractWe analyze self-selection problem when valuations are non-ordered. The corresponding package-pricing solution has specific graph structure. It is helpful in deriving weak su±cient conditions for both partial e±ciency and Pareto-e±ciency. Unlike the ordered valuations case, Pareto e±ciency is shown to be a non-pathological case. Pareto e±ciency and positive consumer surplus are mutually exclusive. Under costs separability optimal package-pricing scheme is shown implementable by small rewards. Counter-examples show that our assumptions are essential. In certain non-ordered situations, package-optimization setting with rations is more appropriate than the standard setting.
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Bibliographic InfoPaper provided by EconWPA in its series General Economics and Teaching with number 0307001.
Length: 43 pages
Date of creation: 03 Jul 2003
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Principal-agent; self-selection; nonlinear pricing; package pricing; Pareto e±ciency; implementation; graph structure; envy cycles;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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