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Multidimensional screening: online computation and limited information

Published: 19 August 2008 Publication History

Abstract

Optimal screening has been studied in economics, game theory, and recently computer science. We study the problem in a nonlinear pricing application, where a monopoly designs a price schedule from which the buyers self-select the quality they wish to consume. We formulate a multidimensional model with buyers' utility functions that need not satisfy the standard single-crossing assumption. We characterize the solution with the first-order optimality conditions and present a framework for analyzing the solution. With the framework, the structure of the solution is easily illustrated and the sensitivity analysis can be done. We give numerical examples that demonstrate the properties of the solution. With these observations, we discuss the complexity of the problem and solving the problem under limited information. We examine what information the monopoly needs when adjusting the price schedule to increase the profit. This paper applies, e.g., to pricing situations in electronic commerce where the seller may have limited information available, and the seller learns about the buyers' preferences online when doing the business.

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Cited By

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  • (2012)Continuous learning methods in two-buyer pricing problemMathematical Methods of Operations Research10.1007/s00186-012-0385-675:3(287-304)Online publication date: 31-Mar-2012
  • (2011)Efficient Contracting in Cloud Service Markets with Asymmetric Information - A Screening ApproachProceedings of the 2011 IEEE 13th Conference on Commerce and Enterprise Computing10.1109/CEC.2011.43(236-243)Online publication date: 5-Sep-2011
  • (2010)An adjustment scheme for nonlinear pricing problem with two buyersEuropean Journal of Operational Research10.1016/j.ejor.2009.01.037201:1(259-266)Online publication date: Feb-2010

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cover image ACM Other conferences
ICEC '08: Proceedings of the 10th international conference on Electronic commerce
August 2008
355 pages
ISBN:9781605580753
DOI:10.1145/1409540
Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Publication History

Published: 19 August 2008

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Author Tags

  1. limited information
  2. mechanism design
  3. multidimensional screening
  4. nonlinear pricing
  5. online computation

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ICEC08
ICEC08: 10th International Conference on E-Commerce
August 19 - 22, 2008
Innsbruck, Austria

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Overall Acceptance Rate 150 of 244 submissions, 61%

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Cited By

View all
  • (2012)Continuous learning methods in two-buyer pricing problemMathematical Methods of Operations Research10.1007/s00186-012-0385-675:3(287-304)Online publication date: 31-Mar-2012
  • (2011)Efficient Contracting in Cloud Service Markets with Asymmetric Information - A Screening ApproachProceedings of the 2011 IEEE 13th Conference on Commerce and Enterprise Computing10.1109/CEC.2011.43(236-243)Online publication date: 5-Sep-2011
  • (2010)An adjustment scheme for nonlinear pricing problem with two buyersEuropean Journal of Operational Research10.1016/j.ejor.2009.01.037201:1(259-266)Online publication date: Feb-2010

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