Document Type

Discussion Paper

Publication Date


CFDP Number


CFDP Revision Date

September 2023

CFDP Pages


Journal of Economic Literature (JEL) Code(s)

D44, D47, D83, D84


We consider a general nonlinear pricing environment with private information. The seller can control both the signal that the buyers receive about their value and the selling mechanism. We characterize the optimal menu and information structure that jointly maximize the seller's profit. The optimal screening mechanism has finitely many items even with a continuum of values. We identify sufficient conditions under which the optimal mechanism has a single item. Thus the seller decreases the variety of items below the efficient level in order to reduce the information rents of the buyers.

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