Seminar
Screening with Product Mismatch
Teck Yong Tan (University of Rochester)
- Date7 December 2026
- Time 14h15 - 15h30
- Room Auditorium 4
Résumé
A monopolist sells a product line whose variants are horizontally differentiated from the buyers’ perspective but ordered by production cost. Buyers privately know their ideal product, and the seller screens through product mismatch. When buyers differ only in horizontal need, mismatch creates rent: the seller induces less mismatch and provides better product fit. When willingness to pay is correlated with horizontal need, mismatch instead reduces rent: the seller induces more mismatch and generates basic- product crowd-out, and stronger horizontal differentiation can expand coverage and raise profit. Because mismatch disutility is type-specific, optimal allocations are also determined by individual rationality
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