The Optimality of Constant Mark-Up Pricing

• Tác giả: Dirk Bergemann, Tibor Heumann, Stephen Morris
• Ngôn ngữ: eng
• Ký hiệu phân loại: 006.74 Markup languages
• Thông tin xuất bản: 2023
• Bộ sưu tập: Metadata
• ID: 196419

Tóm tắt

We consider a nonlinear pricing environment with private information. We provide profit guarantees (and associated mechanisms) that the seller can achieve across all possible distributions of willingness to pay of the buyers. With a constant elasticity cost function, constant markup pricing provides the optimal revenue guarantee across all possible distributions of willingness to pay and the lower bound is attained under a Pareto distribution. We characterize how profits and consumer surplus vary with the distribution of values and show that Pareto distributions are extremal. We also provide a revenue guarantee for general cost functions. We establish equivalent results for optimal procurement policies that support maximal surplus guarantees for the buyer given all possible cost distributions of the sellers.