Model of Non-Linear Pricing with Lower Constraints on Buyers' Utilities
DOI:
https://doi.org/10.31471/2304-7399-2026-22(83)-112-124Keywords:
price discrimination, monopolistic seller, local constraints, expected utilityAbstract
We extend the model of non-linear pricing by Maskin and Riley, which is classical in contract theory. Buyers' utilities are constrained from below, and it is shown that the~statement that only local downward constraints are essential, and all of them are binding, fails in this case. We prove that in our model it is necessary and sufficient to consider also the comparisons of each type with the next type, and strict inequalities in the comparisons of a type with all neighbors are possible only if this type receives the minimal acceptable utility. We propose methods for solving this problem for two types of buyers and conditions for the
offers for the both or for one of the types to be effective (to
provide maximum of social surplus).
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