Title

Optimal Pricing Of Public Lotteries And Comparison Of Competing Mechanisms

Keywords

consumer surplus; lottery pricing; public lotteries; rationing

Abstract

This article establishes optimal pricing rules for rationing indivisible units of rival and otherwise nonexcludable goods by lottery or a hybrid of a lottery and outright sale by posted price. Given the distributional objective of maximizing expected consumer surplus, the solutions to unconstrained and constrained versions of the pricing problem may be expressed in classic inverse elasticity form, with the lottery price appearing as an entry fee, user fee or a combination of the two. Numerical analysis of a rich class of private value distributions indicates that sizable gains in expected consumer surplus can be realized over competitive pricing and zero pricing. © 2014 Taylor & Francis.

Publication Date

1-1-2014

Publication Title

Applied Economics

Volume

46

Issue

26

Number of Pages

3211-3223

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1080/00036846.2014.925080

Socpus ID

84902661663 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/84902661663

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