Optimal Selling Mechanisms for Multiproduct Monopolists: Incentive Compatibility in the Presence of Budget Constraints
AbstractWe demonstrate the existence of an optimal, individually rational, and incentive compatible selling mechanism for a multiproduct monopolist facing a market populated by consumers with budget constraints. Our main contribution is to show via examples and our existence result that, in general, when facing consumers with budget constraints the monopolist is able to maximize profits over the set of individually rational and incentive compatible selling mechanisms only if other goods are available and only if the monopolist's goods are nonessential relative to other goods.
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Bibliographic InfoPaper provided by EconWPA in its series Microeconomics with number 9610002.
Length: 18 pages
Date of creation: 22 Oct 1996
Date of revision:
Note: Type of Document - Latex; prepared on Textures; to print on PostScript; pages: 18
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nonlinear pricing; budget constraints; multi-product;
Other versions of this item:
- Monteiro, Paulo K. & Page Jr., Frank H., 1998. "Optimal selling mechanisms for multiproduct monopolists: incentive compatibility in the presence of budget constraints," Journal of Mathematical Economics, Elsevier, vol. 30(4), pages 473-502, November.
- KLINGER MONTEIRO , Paulo & PAGE, Frank H. Jr., 1997. "Optimal selling mechanisms for multiproduct monopolists : incentive compatibility in the presence of budget constraints," CORE Discussion Papers 1997011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D - Microeconomics
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