The authors study the sale of an excludable, non-rival good by a monopolist when buyers’ values are interdependent, i.e. buyers’ utilities from consuming the good depend on their own and others’ information. Most mass-produced goods fit this framework. They develop a constructive approach to deal with incentive compatibility constraints and thereby characterize the profit-maximizing mechanism. In particular, the paper exploits the structure of the Kuhn-Tucker conditions resulting from the constrained optimizationproblem to define a novel multivariate majorization concept. The majorization technique allows them to generalize Mussa and Rosen’s (1978) “ironing” to settings with multidimensional information. The authors also relate the majorization approach to Rochet and Choné’s (1998) “sweeping” method. They illustrate how discriminatory access rights lead to constrained majorization, resulting in higher seller profits as well as a more efficient production of mass-produced goods.


Nicholas Bedard

Wilfrid Laurier University, Waterloo, Canada

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The seminar presentations are scheduled to last 60 minutes: 45 minutes of presentation and 15 minutes for both comments and questions.

We will experiment with various methods for questions: A moderator collects questions during the presentation. Speakers will be encouraged to pause every few slides to allow a gap for questions. The moderator will relay clarification questions or unmute selectively during the talk. Remaining questions will be collected and asked in the discussion period.

Just like with other initiated virtual seminars, these rules are subject to change as we gain experience with how to handle the seminar most efficiently.

The idea for this format was borrowed from the Chamberlain Seminar. Other online seminars can be found at the AEA website.

The Virtual Market Design Seminar is an open online alternative to seminars cancelled due to the COVID-19. Seminars will cover all fields from market design. The seminar presentations are scheduled to last 60 minutes, after 45 minutes of presentation, 15 minutes are for both comments and question.


26.10.2020 | 16:00 - 17:00 (CET)

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