Multidimensional Screening with Precise Seller Information
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arXiv
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| Auteurs principaux: | , , |
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| Format: | Preprint |
| Publié: |
2024
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| _version_ | 1866912560893132800 |
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| author | Frick, Mira Iijima, Ryota Ishii, Yuhta |
| author_facet | Frick, Mira Iijima, Ryota Ishii, Yuhta |
| contents | A multi-product monopolist faces a buyer who is privately informed about his valuations for the goods. As is well-known, optimal mechanisms are in general complicated, while simple mechanisms -- such as pure bundling or separate sales -- can be far from optimal and do not admit clear-cut comparisons. We show that this changes if the monopolist has sufficiently precise information about the buyer's valuations: Now, pure bundling always outperforms separate sales; moreover, there is a sense in which pure bundling performs essentially as well as the optimal mechanism. To formalize this, we characterize how fast the corresponding revenues converge to the first-best revenue as the monopolist's information grows precise: Pure bundling achieves the same convergence rate to the first-best as optimal mechanisms; in contrast, the convergence rate under separate sales is suboptimal. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2411_06312 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Multidimensional Screening with Precise Seller Information Frick, Mira Iijima, Ryota Ishii, Yuhta Theoretical Economics Computer Science and Game Theory A multi-product monopolist faces a buyer who is privately informed about his valuations for the goods. As is well-known, optimal mechanisms are in general complicated, while simple mechanisms -- such as pure bundling or separate sales -- can be far from optimal and do not admit clear-cut comparisons. We show that this changes if the monopolist has sufficiently precise information about the buyer's valuations: Now, pure bundling always outperforms separate sales; moreover, there is a sense in which pure bundling performs essentially as well as the optimal mechanism. To formalize this, we characterize how fast the corresponding revenues converge to the first-best revenue as the monopolist's information grows precise: Pure bundling achieves the same convergence rate to the first-best as optimal mechanisms; in contrast, the convergence rate under separate sales is suboptimal. |
| title | Multidimensional Screening with Precise Seller Information |
| topic | Theoretical Economics Computer Science and Game Theory |
| url | https://arxiv.org/abs/2411.06312 |