Complexity of solution structures in nonlinear pricing
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This paper characterizes and enumerates the possible solution structures in nonlinear pricing problem when the number of buyer types is given. It is shown that the single-crossing property, which is a standard assumption in the literature, reduces the complexity of solving the problem dramatically. The number of possible solution structures is important when the pricing problem is solved under limited information.
KeywordsNonlinear pricing Screening Complexity Combinatorics Single-crossing condition Graph theory
The author is grateful to Mirko Ruokokoski and Arttu Klemettilä for the helpful comments and suggestions. The author would like to thank the two anonymous reviewers for their valuable suggestions and corrections.
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