This paper considers an entry-deterring nonlinear pricing problem faced by an incumbent firm of a network good. The analysis recognizes that the installed user base/network of incumbent monopolist has preemptive power in deterring entry if the entrant’s good is incompatible with the...

In nonlinear pricing environment with correlated types, we characterize optimal selling mechanisms when buyers could form a coalition to coordinate their reports and to arbitrage on the goods. We find that when the types of agents are weakly positively correlated, the optimal weakly...

This paper studies the cost requirement for two-agent collusion-proof mechanism design. Unlike the existing results for general environments with three or more agents, it is shown that collusive behavior cannot be prevented freely in two-agent nonlinear pricing environments with correlated...

We analyse how consumer heterogeneity affects buying behaviour and the monopoly pricing of a network good and its usage. Under perfect information, sufficiently high heterogeneity yields a unique equilibrium, and the unit price is increasing in heterogeneity. Under incomplete information, we...

The present paper provides a descriptive analysis of the second-degree price discrimination problem on a monopolistic two-sided market. By imposing a simple two-sided framework with two distinct types of agents on one of its market sides, it will be shown that under incomplete information, the...

This paper provides a new explanation for the dominance of the low-powered incentive contract over the high-powered incentive contract using a mixed model of moral hazard and adverse selection. We first show that the power of incentives in the second-best contract is lower than that in the...

This paper examines uberrimae fidei (utmost good faith) with adverse selection in an insurance market. If consumers know their risk type (they know their expected loss), and if they understand the concept of uberrimae fidei, adverse selection is completely eliminated. However, if uberrimae fidei...