Revenue Maximization Under Two-Dimensional Buyers with Type Uncertainty Using Dynamic Mechanism Design

Abstract

I study a decision problem to maximize seller revenue under a two-dimensional buyer with multiple type space with private information. I consider the general case of a single seller with a single good to sell to buyers with private attribute values arriving over 2 time periods. The seller's problem is to determine the optimal time period of allocation. I use mechanism design theory to find an optimal policy for the seller and investigate structural conditions for the optimal seller policy. This paper aims to show that there are tractable and relatively simple ways to deal with multidimensional type space in Revenue Management problems through the application of mechanism design.