Selling two complementary goods
Theoretical Economics
2022-07-15 v4
Abstract
A seller is selling a pair of divisible complementary goods to an agent. The agent consumes the goods only in a specific ratio and freely disposes of excess in either goods. The value of the bundle and the ratio are private information of the agent. In this two-dimensional type space model, we characterize the incentive constraints and show that the optimal (expected revenue-maximizing) mechanism is a ratio-dependent posted price or a posted price mechanism for a class of distributions. We also show that the optimal mechanism is a posted price mechanism when the value and the ratio are independently distributed.
Keywords
Cite
@article{arxiv.2011.05840,
title = {Selling two complementary goods},
author = {Komal Malik and Kolagani Paramahamsa},
journal= {arXiv preprint arXiv:2011.05840},
year = {2022}
}
Comments
Minor revisions