Article ID Journal Published Year Pages File Type
957141 Journal of Economic Theory 2006 35 Pages PDF
Abstract

Multiple objects may be sold by posting a schedule consisting of one price for each possible bundle and permitting the buyer to select the price–bundle pair of his choice. We identify conditions that must be satisfied by any price schedule that maximizes revenue within the class of all such schedules. We then provide conditions under which a price schedule maximizes expected revenue within the class of all incentive compatible and individually rational mechanisms in the nn-object case. We use these results to characterize environments, mainly distributions of valuations, where bundling is the optimal mechanism in the two and three good cases.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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