Optimal and efficient mechanisms with asymmetrically budget constrained buyers

B-Tier
Journal: Games and Economic Behavior
Year: 2021
Volume: 127
Issue: C
Pages: 155-178

Authors (2)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The paper characterizes the optimal (revenue-maximizing) mechanism for allocating a good to buyers who face asymmetric budget constraints. The optimal mechanism belongs to one of two classes. When the budget differences between the buyers are small, the mechanism discriminates only between high-valuation types for whom the budget constraint is binding. All low valuations buyers are treated symmetrically despite budget differences. When budget differences are sufficiently large, the mechanism discriminates in favor of buyers with small budgets when the valuations are low, and in favor of buyers with larger budgets when the valuations are high. We also provide a characterization of the constrained-efficient (surplus maximizing) mechanism and demonstrate that it shares the above properties of the optimal mechanism.

Technical Details

RePEc Handle
repec:eee:gamebe:v:127:y:2021:i:c:p:155-178
Journal Field
Theory
Author Count
2
Added to Database
2026-01-24