Comparing Mechanisms for Selling Correlated Goods

Citation:

Ran Ben Moshe. 7/2022. “Comparing Mechanisms for Selling Correlated Goods.” Discussion Papers, 746.
dp746.pdf1.02 MB

Abstract:

Consider the problem of maximizing the revenue from selling a number of heterogeneous goods to a single buyer whose private values for the goods are drawn from a (possibly correlated) known distribution, and whose valuation for the goods is additive. It is already known that when there are two (or more) goods, simple mechanisms may yield only a negligible fraction of the optimal revenue. This thesis compares revenues from various classes of mechanisms to revenues from the two simplest mechanisms — selling the goods separately and selling them as a bundle — by using previously defined tools, namely, multiple of separated revenue (MoS) and multiple of bundled revenue (MoB). We show in particular that monotonic mechanisms cannot yield more than times the separated revenue (where k is the number of goods), and obtain bounds on the revenue of deterministic mechanisms.