Discounts For Qualified Buyers Only

David McAdams ()

No 10-62, Working Papers from Duke University, Department of Economics

Abstract: The standard monopoly pricing problem is re-considered when the buyer can disclose his type (e.g. age, income, experience) at some cost. In the optimal sales mechanism with costly disclosure, the seller posts a price list, including a \sticker price" available to any buyer and a schedule of discounts available to those who disclose certain types. Unambiguous welfare implications of such a pricing policy are available in the limiting case when the buyer's type is fully informative: (i) The buyer is better o and the monopolist worse o when disclosure is more costly. (ii) When discounts are suciently rare, social welfare is strictly less than if the seller could not o er discounts.

Pages: 40
Date: 2010
New Economics Papers: this item is included in nep-com, nep-cta and nep-ind
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Working Paper: Discounts For Quali ed Buyers Only (2010)
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