The traditional theory of monopolistic screening tackles individual self-selection but does not address the possibility that buyers could form a coalition to coordinate their purchases and to reallocate the goods. In this paper, we design the optimal sale mechanism which takes into account both...

In this paper, we study the transaction costs in coalition formation created by asymmetric information in a setting in which two agents producing complementary inputs can collude. They are assumed to have correlated private information and be protected by limited liability. We first characterize...