Monopoly Provision of Product Quality and Warranties: An Exploration in the Theory of Multi-Dimensional Screening

John Moore, Steven A. Matthews

Research output: Contribution to journalArticlepeer-review

Abstract

New ways of handling incentive constraints between nonadjacent types of buyer are used to solve a monopoly screening problem. The monopoly wishes to price discriminate by designing a product line of goods distinguished by different quality, warranty, and price attributes. The multidimensionality of the line causes the local approach usually taken to fail. The optimal product line is nevertheless fully characterized. Contrary to the result always obtained in simple models, attributes need not be monotone in buyer type, e.g., more eager types sometimes receive lower quality. Copyright 1987 by The Econometric Society.
Original languageEnglish
Pages (from-to)441-467
Number of pages27
JournalEconometrica
Volume55
Issue number2
Publication statusPublished - Mar 1987

Fingerprint

Dive into the research topics of 'Monopoly Provision of Product Quality and Warranties: An Exploration in the Theory of Multi-Dimensional Screening'. Together they form a unique fingerprint.

Cite this