The present paper investigates
the multi-dimensional mechanism design in which
buyers have taste and budget as their private information. The paper shows an easy proof of a two-dimensional optimal
direct mechanism by aone-dimensional
indirect mechanism: A canonical mechanism in the traditional
one-dimensional setting, i.e., function
of one variable, the buyer’s
taste. It also sheds light on where the
difficulty lies implementability of a general direct mechanism—not optimal—by a canonical mechanism.
Rochet, J.C. and Stole, L. (2003) The Economics of Multidimensional Screening. In: Dewatripont, M., Hansen, L. and Turnovski, S., Eds., Advances in Economics and Econometrics: Theory and Applications, Eighth World Congress, Volume 1, Chapter 5, Cambridge University Press.