World Academy of Science, Engineering and Technology
Published May 25, 2012 | Version 9180
Journal article Open

An Adverse Model for Price Discrimination in the Case of Monopoly

Description

We consider a Principal-Agent model with the Principal being a seller who does not know perfectly how much the buyer (the Agent) is willing to pay for the good. The buyer-s preferences are hence his private information. The model corresponds to the nonlinear pricing problem of Maskin and Riley. We assume there are three types of Agents. The model is solved using "informational rents" as variables. In the last section we present the main characteristics of the optimal contracts in asymmetric information and some possible extensions of the model.

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References

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