Maximal Revenue with Multiple Goods: Nonmonotonicity and Other Observations
Consider 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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- Alejandro M. Manelli & Daniel R. Vincent, 2004.
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"Approximate Revenue Maximization with Multiple Items,"
Levine's Working Paper Archive
786969000000000433, David K. Levine.
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- Sergiu Hart & Noam Nisan, 2014. "How Good Are Simple Mechanisms for Selling Multiple Goods?," Discussion Paper Series dp666, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
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