Multidimensional screening under nonlinear costs: Limits of standard approach

We generalize the usual screening approach and conditions for efficiency-at-the-top and acyclic property from linear to fixed-plus-separable or concave costs and multidimensional commodities. But under non-concave costs, like capacity constraints, an example shows a cycle in the solution graph. The cycle makes the standard screening solution non-implementable and approach inadequate.

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Year of publication:	2010
Authors:	Kokovin, Sergey ; Nahata, Babu ; Zhelobodko, Evgeny
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 107.2010, 2, p. 263-265
Publisher:	Elsevier
Keywords:	Nonlinear pricing Screening Graphs Capacity constraints Increasing returns

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008551428