Selling Two Identical Objects

Sushil Bikhchandani and Debasis Mishra

Discussion Papers from Indian Statistical Institute, Delhi

Abstract: It is well-known that optimal (i.e., revenue-maximizing) selling mechanisms in multidimensional type spaces may involve randomization. We study mechanisms 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 two marginal values of the buyer are not independent. We obtain sucient conditions on the distribution of buyer values for the existence of an optimal mechanism that is deterministic. In the DMV model, we show that under a well-known condition, it is optimal to sell the first unit deterministically. Under the same sucient condition, a bundling mechanism (which is deterministic) is optimal in the IMV model. Under a stronger sufficient condition, a deterministic mechanism is optimal in the DMV model. Our results apply to heterogenous objects when there is a specified sequence in which the two objects must be sold.

Pages: 47 pages
Date: 2020-09
New Economics Papers: this item is included in nep-des and nep-mic
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Selling two identical objects (2022)
Working Paper: Selling Two Identical Objects (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:alo:isipdp:20-07

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