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We consider a monopolistic supplier’s optimal choice of wholesale tariffs when downstream firms are privately informed about their retail costs. Under discriminatory pricing, downstream firms that differ in their ex ante distribution of retail costs are offered different tariffs. Under uniform...
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paid by the winner. We study the impact of these price-externalities on the first-price auction and the second … independently from the identity of the winner. We prove that the first-price auction is not affected by this kind of price-externalities … by the presence of such price-externalities. In any case, in comparison with the first-price auction, the second …
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