buyingToBundlePi
Definitionbundlingeconomicsmechanism-designset-function
Defines the platform's bundle-profit set function from Buying to Bundle: for a selected finite set of sellers S, Pi(S) is bundle revenue Rev(v_S) minus the sum of each selected seller's standalone monopoly revenue/opportunity cost Rev(mu_i, sigma).
Definition code
import Mathlib.Algebra.BigOperators.Group.Finset.Basic
import Mathlib.Data.Finset.Basic
import Mathlib.Data.Real.Basic
noncomputable section
/--
Model data for the bundle-profit set function from
"Buying to Bundle: Optimal Sourcing from Monopolistic Sellers".
For a selected bundle `S`, `bundleRevenue S` is the revenue obtained from
selling the bundle to buyers, corresponding to `Rev(v_S)` in the paper.
For a seller `i`, `outsideOptionRevenue i` is the seller's standalone
monopoly revenue/opportunity cost, corresponding to `Rev(mu_i, sigma)`.
-/
structure BuyingToBundlePiModel (Seller : Type) where
bundleRevenue : Finset Seller -> Real
outsideOptionRevenue : Seller -> Real
/--
The platform's bundle-profit set function:
Pi(S) = Rev(v_S) - sum_{i in S} Rev(mu_i, sigma).
This is a function of the selected set of sellers, not merely a function of
the market size.
-/
def buyingToBundlePi {Seller : Type}
(M : BuyingToBundlePiModel Seller) (S : Finset Seller) : Real :=
M.bundleRevenue S - Finset.sum S M.outsideOptionRevenueSource
Buying to Bundle: Optimal Sourcing from Monopolistic Sellers, Section 3.1 and Equation (1) context; profit as a function of the selected seller bundle.