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The Robustness of Exclusion in Multi-dimensional Screening

  • Paulo Barelli

    (University of Rochester)

  • Suren Basov

    (La Trobe University)

  • Mauricio Bugarin

    (Insper Institute)

  • Ian King

    (University of Melbourne)

We extend Armstrong’s result on exclusion in multi-dimensional screening models in two key ways, providing support for the view that this result holds true in a large class of models and is applicable to many different markets. First, we relax the strong technical assumptions he imposed on preferences and consumer types. Second, we extend the result beyond the monopolistic market structure to some oligopoly settings. We illustrate the results with several examples and applications.

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Paper provided by University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number 576.

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Length: 31 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:roc:rocher:576
Contact details of provider: Postal: University of Rochester, Center for Economic Research, Department of Economics, Harkness 231 Rochester, New York 14627 U.S.A.

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  1. Rochet, J. C., 1985. "The taxation principle and multi-time Hamilton-Jacobi equations," Journal of Mathematical Economics, Elsevier, vol. 14(2), pages 113-128, April.
  2. Paulo Klinger Monteiro & Frank Page & Benar fux Svaiter, 2001. "The one object optimal auction and the desirability of exclusion," GE, Growth, Math methods 0112002, EconWPA.
  3. Bertrand VILLENEUVE, 2003. "Concurrence et antisélection multidimensionnelle en assurance," Annals of Economics and Statistics, GENES, issue 69, pages 119-142.
  4. Philip J. Reny, 1999. "On the Existence of Pure and Mixed Strategy Nash Equilibria in Discontinuous Games," Econometrica, Econometric Society, vol. 67(5), pages 1029-1056, September.
  5. Michael Smart, 1996. "Competitive Insurance Markets with Two Unobservables," Working Papers msmart-96-01, University of Toronto, Department of Economics.
  6. Jean-Charles Rochet & Lars A. Stole, 2002. "Nonlinear Pricing with Random Participation," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 277-311.
  7. Jullien, Bruno, 1997. "Participation Constraints in Adverse Selection Models," IDEI Working Papers 67, Institut d'Économie Industrielle (IDEI), Toulouse.
  8. Basov Suren & Yin Xiangkang, 2010. "Optimal Screening by Risk-Averse Principals," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-25, March.
  9. Armstrong, Mark & Vickers, John, 2001. "Competitive Price Discrimination," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 579-605, Winter.
  10. S. Basov & P. Bardsley, 2004. "A Model of Grants Distribution: A Screening Approach," Econometric Society 2004 Australasian Meetings 252, Econometric Society.
  11. Armstrong, Mark, 1999. "Optimal Regulation with Unknown Demand and Cost Functions," Journal of Economic Theory, Elsevier, vol. 84(2), pages 196-215, February.
  12. Armstrong, Mark, 1999. "Price Discrimination by a Many-Product Firm," Review of Economic Studies, Wiley Blackwell, vol. 66(1), pages 151-68, January.
  13. Jean-Charles Rochet & Philippe Chone, 1998. "Ironing, Sweeping, and Multidimensional Screening," Econometrica, Econometric Society, vol. 66(4), pages 783-826, July.
  14. Armstrong, Mark, 1996. "Multiproduct Nonlinear Pricing," Econometrica, Econometric Society, vol. 64(1), pages 51-75, January.
  15. David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
  16. Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
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