2016/07/13 by Andrew Chi-Chih Yao, Yao, Andrew Chi-Chih
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #Computer Science and Game Theory (cs.GT) #Consumer Market Behavior and Pricing #Economic theories and models #FOS: Computer and information sciences #Supply Chain and Inventory Management
paper · pdf · doi:10.48550/arxiv.1607.03685
openalex publication_date 2016/07/13 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Very few exact solutions are known for the monopolist's k-item n-buyer maximum revenue problem with additive valuation in which k, n >1 and the buyers i have independent private distributions Fji on items j. In this paper we derive exact formulas for the maximum revenue when k=2 and Fji are any IID distributions on support of size 2, for both the dominant-strategy (DIC) and the Bayesian (BIC) implementations. The formulas lead to the simple characterization that, the two implementations have identical maximum revenue if and only if selling-separately is optimal for the distribution. Our results also give the first demonstration, in this setting, of revenue gaps between the two implementations. For instance, if k=n=2 and Pr\XF=1\=Pr\XF=2\=(1)/(2), then the maximum revenue in the Bayesian implementation exceeds that in the dominant-strategy by exactly 2%; the same gap exists for the continuous uniform distribution XF over [a, a+1]∪[2a, 2a+1] for all large a.