The marginal tariff approach without single-crossing

B-Tier
Journal: Journal of Mathematical Economics
Year: 2015
Volume: 61
Issue: C
Pages: 166-184

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study a specific class of one-dimensional monopolistic nonlinear pricing models without the single-crossing condition. In this class we show that the monopolist optimally splits quantities in two groups: low and high demand. The marginal tariff is sufficient to determine the demand curve (or, equivalently, the monopolist can apply the demand profile approach) within each group. However, given the failure of the single-crossing condition, a global incentive compatibility constraint that prevents deviation across demand groups binds. Therefore, the demand profile approach is no longer valid and we have to modify it accordingly to deal with our problem. We give a complete characterization of its solution.

Technical Details

RePEc Handle
repec:eee:mateco:v:61:y:2015:i:c:p:166-184
Journal Field
Theory
Author Count
3
Added to Database
2026-01-24