English

Regularity properties of optimal transportation problems arising in hedonic pricing models

Analysis of PDEs 2011-10-14 v1

Abstract

We study a form of optimal transportation surplus functions which arise in hedonic pricing models. We derive a formula for the Ma-Trudinger-Wang curvature of these functions, yielding necessary and sufficient conditions for them to satisfy \textbf{(A3w)}. We use this to give explicit new examples of surplus functions satisfying \textbf{(A3w)}, of the form b(x,y)=H(x+y)b(x,y)=H(x+y) where HH is a convex function on Rn\mathbb{R}^n. We also show that the space of equilibrium contracts in the hedonic pricing model has the maximal possible dimension, a result of potential economic interest.

Keywords

Cite

@article{arxiv.1110.2790,
  title  = {Regularity properties of optimal transportation problems arising in hedonic pricing models},
  author = {Brendan Pass},
  journal= {arXiv preprint arXiv:1110.2790},
  year   = {2011}
}