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Licensed Unlicensed Requires Authentication Published by De Gruyter February 17, 2011

A Property of Solutions to Linear Monopoly Problems

  • Gregory Pavlov

We extend the “no-haggling” result of Riley and Zeckhauser (1983) to the class of linear multiproduct monopoly problems when the buyer’s valuations are smoothly distributed. In particular, we show that there is no loss for the seller in optimizing over mechanisms such that all allocations belong to the boundary of the feasible set. The set of potentially optimal mechanisms can be further restricted when the costs are sufficiently low: the optimal mechanisms use only allocations from the “north-east” boundary of the feasible set and the null allocation.

Published Online: 2011-2-17

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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