Abstract
We provide an algorithm for solving multidimensional screening problems which are intractable analytically. The algorithm is a primal–dual algorithm which alternates between optimizing the primal problem of the surplus extracted by the principal and the dual problem of the optimal assignment to deliver to the agents for a given surplus. We illustrate the algorithm by solving (i) the generic monopolist price discrimination problem and (ii) an optimal tax problem covering income and savings taxes when citizens differ in multiple dimensions.
Keywords
Multidimensional screening; Algorithm; Numerical methods; Price discrimination; Optimal tax;
JEL codes
- C02: Mathematical Methods
- H21: Efficiency • Optimal Taxation
- D42: Monopoly
Replaces
Guillaume Carlier, Xavier Dupuis, Jean-Charles Rochet, and John Thanassoulis, “A General Solution to the Quasi Linear Screening Problem”, TSE Working Paper, n. 24-1537, May 2024.
Reference
Guillaume Carlier, Xavier Dupuis, Jean-Charles Rochet, and John Thanassoulis, “A General Solution to the Quasi Linear Screening Problem”, Journal of Mathematical Economics, vol. 114, October 2024, p. 103025.
See also
Published in
Journal of Mathematical Economics, vol. 114, October 2024, p. 103025