Bundling as an optimal selling mechanism for a multiple-good monopolist

Manelli, Alejandro M.; Vincent, D

doi:10.1016/j.jet.2005.08.007

Cited by 169 publications

(162 citation statements)

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“…24 Pure bundling refers to a situation where participants are admitted either to all public goods at once or to none.…”

Section: Mixed Bundling Dominates Ramsey-boiteux Pricingmentioning

confidence: 99%

The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

Hellwig

2007

Journal of Public Economics

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This paper studies the relation between Bayesian mechanism design and the Ramsey-Boiteux approach to the provision and pricing of excludable public goods. For a large economy with private information about individual preferences, the two approaches are shown to be equivalent if and only if, in addition to incentive compatibility and participation constraints, the …nal allocation of private-good consumption and admission tickets to public goods satis…es a condition of renegotiation proofness. Without this condition, a mechanism involving mixed bundling, i.e. combination tickets at a discount, is superior.

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“…24 Pure bundling refers to a situation where participants are admitted either to all public goods at once or to none.…”

Section: Mixed Bundling Dominates Ramsey-boiteux Pricingmentioning

confidence: 99%

The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

Hellwig

2007

Journal of Public Economics

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“…However, since the distribution of types is atomless, how indifferences are broken does not affect the results. 8 These two inequalities, jointly with…”

Section: Definitionmentioning

confidence: 97%

“…However, the setting with two objects is considerably more difficult and Manelli and Vincent (2006, 2007, 2012 prove that the form of the optimal mechanism depends on the distribution of the buyer's valuations, unlike in the one-object environment. In some cases the optimal mechanism is characterized by a price schedule which specifies a price for each object and a price for the bundle of the two objects, but in other cases the optimal mechanism assigns the objects randomly.…”

Section: Introductionmentioning

confidence: 99%

“…2 In general, many different mechanisms can be optimal as the distribution of valuations varies, and typically not much is known about the optimal mechanism for a given distribution, except for a few specific settings. For instance, when the valuations are independently and identically distributed, Manelli and Vincent (2006), Pavlov (2011), and Giannakopoulos (2014) solve the problem for uniform or exponential distributions; Hart and Nisan (2014) prove that pure bundling is optimal if the density for each valuation decreases quickly. Hart and Nisan (2014) also try to bound from below the fraction of the optimal profit that can be obtained by selling the objects separately (i.e., posting a suitable price for each object, as in two unrelated one-object settings), or by selling them in a bundle.…”

Section: Introductionmentioning

confidence: 99%

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On the optimality of pure bundling for a monopolist

Menicucci

Hurkens

Jeon

2015

Journal of Mathematical Economics

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This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if each buyer's type has a non-negative virtual valuation for each object, then the optimal price schedule is such that the objects are sold only in a bundle; weaker conditions suffice if valuations are independently and identically distributed. Under somewhat stronger conditions, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.

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“…The paper also shows that, if the elasticity of the density function is nondecreasing in the preference parameter, then a second-best mechanism is necessarily characterized by an admission fee, i.e., randomization in admissions is undesirable. Remarkably, the monotonicity condition on the density function is the same as the condition that Manelli and Vincent (2006) used to show that randomization is undesirable in the two-dimensional mechanism design problem of a profit-maximizing monopolist selling two goods to consumers with additively separable preferences when the preference parameters for the different goods are mutually independent.…”

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confidence: 99%

Utilitarian mechanism design for an excludable public good

Hellwig

2009

Econ Theory

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This paper studies the design of optimal utilitarian mechanisms for an excludable public good. Excludability provides a basis for making people pay for admissions; the payments can be used for redistribution and/or funding. Whereas previous work assumed that admissions are governed by the payment or nonpayment of a price, this paper allows for arbitrary admission rules. With sufficient inequality aversion, nondegenerate randomization in admissions is shown to be desirable for certain model specifications, with and without participation constraints. The paper also gives a sufficient condition on the distribution of preferences under which randomization is undesirable.Keywords Utilitarian welfare maximization · Admission rules for excludable public goods · Randomization in optimal mechanisms JEL Classification D61 · D63 · H21 · H41

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Bundling as an optimal selling mechanism for a multiple-good monopolist

Cited by 169 publications

References 12 publications

The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

The provision and pricing of excludable public goods: Ramsey–Boiteux pricing versus bundling

On the optimality of pure bundling for a monopolist

Utilitarian mechanism design for an excludable public good

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