Kokovin, Sergey and Nahata, Babu and Zhelobodko, Evgeny (2010): All solution graphs in multidimensional screening. Forthcoming in: Journal of New Economic Association, Russia
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We study general discrete-types multidimensional screening without any noticeable restrictions on valuations, using instead epsilon-relaxation of the incentive-compatibility constraints. Any active (becoming equality) constraint can be perceived as "envy" arc from one type to another, so the set of active constraints is a digraph. We find that: (1) any solution has an in-rooted acyclic graph ("river"); (2) for any logically feasible river there exists a screening problem resulting in such river. Using these results, any solution is characterized both through its spanning-tree and through its Lagrange multipliers, that can help in finding solutions and their efficiency/distortion properties.
|Item Type:||MPRA Paper|
|Original Title:||All solution graphs in multidimensional screening|
|English Title:||All solution graphs in multidimensional screening|
|Keywords:||incentive compatibility; multidimensional screening; second-degree price discrimination; non-linear pricing; graphs|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly; Monopolization Strategies
D - Microeconomics > D4 - Market Structure and Pricing > D42 - Monopoly
|Depositing User:||Sergey Kokovin|
|Date Deposited:||04. Apr 2011 07:01|
|Last Modified:||15. Feb 2013 21:14|
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