Allocating Positional Goods: A Mechanism Design Approach

Peiran Xiao

Papers from arXiv.org

Abstract: I study the optimal allocation of positional goods in the presence of externalities arising from consumers' concerns about relative consumption. Applications include luxury goods, priority services, education, and organizational hierarchies. Using a mechanism-design approach, I characterize the set of feasible allocations through a majorization condition. The revenue-maximizing mechanism possibly excludes some buyers and fully separates participants under Myerson's regularity condition. The seller can guarantee at least half the maximum revenue by offering a single good. Without exclusion, offering more levels of goods decreases (increases) consumer surplus under increasing (decreasing) failure rates. Higher participation raises consumer surplus under increasing failure rates.

Date: 2024-11, Revised 2025-10
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2411.06285 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2411.06285

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().