15.5. Consider a bundling problem where the principal is the seller of a good with a...

15.5. Consider a bundling problem where the principal is the seller of a good with a value function v = t − 2 q where t is the price charged for a bundle and 2 q is the cost of the bundle that contains q units of the √ good. A buyer of type θ has a utility function u ( q , t ) = θ q − t , where θ is either 16 or 20 with probability 0.5 each. The buyers reservation utility is zero. (a) (b) Calculate the optimal bundles, ( q L formation. Calculate the optimal bundles, ( q ∗ L information. , t ˆ L ) and ( q ˆ H , t ∗ L , ˆ t H ) , under full inˆ ) and ( q ∗ H , t ∗ H ) , under asymmetric

Expert Solution

Rahul Sunny answered 6 months ago

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