Selling two complementary goods

Komal Malik and Kolagani Paramahamsa

Papers from arXiv.org

Abstract: A seller is selling a pair of divisible complementary goods to an agent. The agent consumes the goods only in a specific ratio and freely disposes of excess in either goods. The value of the bundle and the ratio are private information of the agent. In this two-dimensional type space model, we characterize the incentive constraints and show that the optimal (expected revenue-maximizing) mechanism is a ratio-dependent posted price or a posted price mechanism for a class of distributions. We also show that the optimal mechanism is a posted price mechanism when the value and the ratio are independently distributed.

Date: 2020-11, Revised 2022-07
New Economics Papers: this item is included in nep-des and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2011.05840

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