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Regularity properties of optimal transportation problems arising in hedonic pricing models. (English) Zbl 1271.91053

Summary: We study a form of optimal transportation surplus functions which arise in hedonic pricing models. We derive a formula for the Ma-Trudinger-Wang curvature of these functions, yielding necessary and sufficient conditions for them to satisfy (A3w). We use this to give explicit new examples of surplus functions satisfying (A3w) of the form \(b(x,y)=H(x+y)\), where \(H\) is a convex function on \(\mathbb{R}^n\). We also show that the distribution of equilibrium contracts in this hedonic pricing model is absolutely continuous with respect to Lebesgue measure, implying that buyers are fully separated by the contracts they sign, a result of potential economic interest.

MSC:

91B24 Microeconomic theory (price theory and economic markets)
90B06 Transportation, logistics and supply chain management
91B68 Matching models
49N60 Regularity of solutions in optimal control
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