Optimal selling mechanisms for multiproduct monopolists: incentive compatibility in the presence of budget constraints

Paulo Monteiro and Frank Page

No 1997011, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We demonstrate the existence of an optimal, individually rational, and incentive compatible selling mechanism for a multiproduct monopolist facing a market populated by consumers with budget constraints. Our main contribution is to show that, in general, when facing consumers with budget constraints the monopolist is able to maximize profits over the set of individually rational and incentive compatible selling mechanisms only if other goods are available and only if the monopolist’s goods are nonessential relative to other goods.

Date: 1997-02-01
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Related works:
Journal Article: Optimal selling mechanisms for multiproduct monopolists: incentive compatibility in the presence of budget constraints (1998)
Working Paper: Optimal Selling Mechanisms for Multiproduct Monopolists: Incentive Compatibility in the Presence of Budget Constraints (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997011

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