Abstract

In their study of price discrimination for a monopolist selling heterogeneous products to consumers having private information about their own multidimensional types, J.-C. Rochet and P. Choné [Ironing, sweeping, and multidimensional screening, Econometrica 66 (1998) 783–826] discovered a new form of screening in which consumers with intermediate types are bunched together into isochoice groups of various dimensions incentivized to purchase the same product. They analyzed a particular example involving customer types distributed uniformly over the unit square. For this example, we prove that their proposed solution is not selfconsistent, and we indicate how consistency can be restored.

Author information

Contact details are reproduced from the original publication and may be historical.

Kelvin Shuangjian Zhang

School of Mathematical Sciences, Fudan University, Shanghai, P. R. China

ksjzhang@fudan.edu.cn

Keywords

  • Principal-Agent problem
  • Rochet-Choné
  • asymmetric information
  • adverse selection
  • monopolist nonlinear pricing
  • multidimensional screening
  • bilevel optimization
  • free boundary
  • bunching

Mathematics Subject Classification

91B43, 35Q91; 35R35, 49N10, 90B50, 91B41

References

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Suggested citation

R. J. McCann, K. S. Zhang. “Remark on Rochet and Choné's Square Screening Example.” Journal of Convex Analysis 32 (2025), No. 2, 579–584. https://doi.org/10.68381/jca32028

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Published by Heldermann Verlag, 2025. Rights now held by Banach Press LLC.