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 ℝn. 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.