Ironing, sweeping, and multidimensional screening

Article Abstract:

Evidences for the results on the multidimensional interpretation of the multiproduct monopolist problem studied by Mussa and Rosen (1978) are presented. The findings may also be applied to multidimensional nonlinear pricing studies done by Wilson (1993) and Roberts (1979). Bunching is strong in the multidimensional screening problems which emerges from the disparity betwween participation constraints and second order incentive compatibility conditions. A new technique, the sweeping procedure, is consequently developed, to handle bunching in multidimensional screening problems. The procedure may also be used in the study of collusion under asymmetric information and auctions eith externalities.

Monopolies

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Learning and strategic pricing

Article Abstract:

The role played by incomplete information, learning and strategic pricing in the consumption behavior was modeled after the multi-armed bandit problem where the cost of experimentation to the consumer is endogenized by allowing price competition between sellers. The model showed a unique equilibrium where a myopic pricing rule emerges that shows prices below marginal cost occur naturally to support the experimentation of the consumer in his buying behavior among different sellers.

Evaluation, Learning models (Stochastic processes), Information theory, Stochastic models, Information theory in economics

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Asset pricing in economies with frictions

Article Abstract:

A model is developed to determine the effects of proportional transaction costs, short-sale constraints and margin requirements on asset return data on intertemporal marginal rates of substitution (IMRSs). Results show that small transactions costs decrease the required variability of IMRSs, indicating that asset return data can be consistent with the low variability of aggregate consumption based IMRSs.

Assets (Accounting)

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