Selling Two Goods Optimally

Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 9135)

Abstract

We provide sufficient conditions for revenue maximization in a two-good monopoly where the buyer’s valuations for the items come from independent (but not necessarily identical) distributions over bounded intervals. Under certain distributional assumptions, we give exact, closed-form formulas for the prices and allocation rules of the optimal selling mechanism. As a side result we give the first example of an optimal mechanism in an i.i.d. setting over a support of the form [0, b] which is not deterministic. Since our framework is based on duality techniques, we were also able to demonstrate how slightly relaxed versions of it can still be used to design mechanisms that have very good approximation ratios with respect to the optimal revenue, through a “convexification” process.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.University of OxfordOxfordUK

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