OPTIMAL SELLING PROCEDURES WITH FIXED COSTS

This paper studies tile optimal selling procedures for a monopolist, w hen consumers valuations are unknown and there are fixed costs. The ru led costs introduce a positive externality among customers: each custo mer benefits from the presence of others who help cover the fixed cost s. In this context it is optimal for the monopolist to make the probab ility of each individual being served contingent on the valuations of all the other consumers. The monopolist therefore sets a minimum price and then lets each customer contribute as much as he wishes. (C) 1996 Academic Press, Inc.