Review of Economic Design

, 12:245 | Cite as

Optimal auctions for asymmetrically budget constrained bidders

  • Alexey Malakhov
  • Rakesh V. Vohra
Original Paper


We consider an environment with a single divisible good and two bidders. The valuations of the bidders are private information but one bidder has a commonly known budget constraint. For this environment we derive the revenue maximizing subsidy free dominant strategy incentive compatible auction.


Dominant strategy Shortest path Network 

JEL Classification

C61 C70 D44 


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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.Department of Finance, Sam M. Walton College of BusinessUniversity of ArkansasFayettevilleUSA
  2. 2.Department of Managerial Economics and Decision Sciences, Kellogg School of ManagementNorthwestern UniversityEvanstonUSA

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