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Selling two identical objects

Author

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  • Bikhchandani, Sushil
  • Mishra, Debasis

Abstract

It is well-known that optimal (i.e., revenue-maximizing) selling mechanisms in multidimensional type spaces may involve randomization. We obtain conditions under which deterministic mechanisms are optimal for selling two identical, indivisible objects to a single buyer. We analyze two settings: (i) decreasing marginal values (DMV) and (ii) increasing marginal values (IMV). Thus, the values of the buyer for the two units are not independent.

Suggested Citation

  • Bikhchandani, Sushil & Mishra, Debasis, 2022. "Selling two identical objects," Journal of Economic Theory, Elsevier, vol. 200(C).
    • Handle: RePEc:eee:jetheo:v:200:y:2022:i:c:s0022053121002143
    DOI: 10.1016/j.jet.2021.105397
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    Cited by:

    1. Bonatti, Alessandro & Bergemann, Dirk & Haupt, Andreas & Smolin, Alex, 2021. "The Optimality of Upgrade Pricing," CEPR Discussion Papers 16394, C.E.P.R. Discussion Papers.
    2. Debasis Mishra & Kolagani Paramahamsa, 2022. "Selling to a principal and a budget-constrained agent," Discussion Papers 22-02, Indian Statistical Institute, Delhi.
    3. Debasis Mishra & Kolagani Paramahamsa, 2022. "Selling to a principal and a budget-constrained agent," Papers 2202.10378, arXiv.org, revised Jul 2022.

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    More about this item

    Keywords

    Multi-object auctions; Revenue maximization; Multidimensional mechanism design;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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