Participation and Incentive Compatibility Constraints in Menu Pricing

Hi everyone, in this video I discuss participation and incentive compatability constraints when a firm engages in menu pricing.

0:00 Introduction
0:50 Participation (Reservation) Constraints
1:50 Incentive Compatability Constraints
4:11 Profit Maximising Prices
5:29 Example
8:52 Discussing why the solutions are equalities (points of indifference)
12:30 Why P(LQ)= WTP_L(LQ)

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