Tehran Institute for Advanced Studies (TeIAS)

/ Multi-Dimensional Virtual Values and Second-Degree Price Discrimination __ Nima Haghpanah

Talk

Multi-Dimensional Virtual Values and Second-Degree Price Discrimination

August 6, 2017

Venue

Khatam University, Building No2.
Address: Mollasadra Blvd., North Shirazi St., East Daneshvar St., No.17. See location on Google map

+982189174612

Dr. Nima Haghpanah

Assistant Professor of Economics at Pennsylvania State University  

Overview

In this talk, we consider a multi-dimensional screening problem of selling a product with multiple quality levels. We show that selling only the highest quality product is optimal if higher valued consumers are less sensitive to quality. To prove this result, we generalize a standard approach of optimizing with relaxed incentive compatibility constraints. With multi-dimensional preferences, binding incentive compatibility constraints are endogenous to the mechanism, and thus it is not clear which ones can be relaxed. Our methodology identifies the appropriate relaxation. This approach also allows us to identify conditions for the optimality of grand bundling in a multi-product setting with additive preferences.

Biography

Nima Haghpanah is an assistant professor of Economics at Pennsylvania State University. Prior to that, he was a postdoctoral associate at MIT CSAIL and Sloan School of Management. He obtained his PhD in 2014 from Northwestern University. His dissertation was on optimal multi-parameter auctions, and his research interests are mechanism design, auction design, and game theory. Nima has received a best dissertation award from Northwestern University, and a graduate fellowship from the Simons Foundation