Citation:
Sergiu Hart, P. J. R. . (2012). Maximal Revenue with Multiple Goods: Nonmonotonicity and Other Observations. Discussion Papers. presented at the 11, Thoretical Economics. Retrieved from /files/Paper
Abstract:
Consider the problem of maximizing the revenue from selling a number of goods to a single buyer. We show that, unlike the case of one good, when the buyer's values for the goods increase the seller's maximal revenue may well decrease. We also provide a characterization of revenue-maximizing mechanisms (more generally, of "seller-favorable" mechanisms) that circumvents nondifferentiability issues. Finally, through simple and transparent examples, we clarify the need for and the use of randomization when maximizing revenue in the multiple-goods versus the one-good case.