Recognition Program
Authors: Domenico Menicucci, Sjaak Hurkens and Doh-Shin Jeon
Journal of Mathematical Economics, Vol. 60, 33-42, March, 2016
This paper considers a monopolist selling two objects to a single buyer with privately observed valuations. We prove that if the virtual valuation for each object is non-negative for all possible types, then the optimal price schedule is such that the objects are sold only in a bundle. Under an additional regularity condition, pure bundling is the optimal sale mechanism among all individually rational and incentive compatible mechanisms.
This paper originally appeared as
Barcelona School of Economics Working Paper 771
This paper is acknowledged by the Barcelona School of Economics Recognition Program