On the optimality of pure bundling for a monopolist
Domenico Menicucci,
Sjaak Hurkens and
Doh-Shin Jeon
Journal of Mathematical Economics, 2015, vol. 60, issue C, 33-42
Abstract:
This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if the virtual valuation for each object is non-negative for all possible types, then the optimal price schedule is such that the objects are sold only in a bundle. Under an additional regularity condition, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.
Keywords: Monopoly pricing; Price discrimination; Multi-dimensional mechanism design; Pure bundling (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (12)
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Working Paper: On the Optimality of Pure Bundling for a Monopolist (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:60:y:2015:i:c:p:33-42
DOI: 10.1016/j.jmateco.2015.06.011
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