Theory of nonlinear pricing
Theory of nonlinear pricing
- monopolist seller charges P(q) for an m-vector bundle q of its products
- customer of n-vector type t purchases q(t): W(t) = max U(q,t) - P(q)
- By Revelation Principle, can choose vectors q(t), W(t)
- example: Generalized Vickrey Auction (MacKie-Mason and Varian)