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Optimal auctions for asymmetrically budget constrained bidders

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Abstract

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.

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Authors and Affiliations

  1. Department of Finance, Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR, 72701, USA

    Alexey Malakhov

  2. Department of Managerial Economics and Decision Sciences, Kellogg School of Management, Northwestern University, Evanston, IL, 60208, USA

    Rakesh V. Vohra

Authors
  1. Alexey Malakhov
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  2. Rakesh V. Vohra
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Correspondence to Alexey Malakhov.

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Malakhov, A., Vohra, R.V. Optimal auctions for asymmetrically budget constrained bidders. Rev Econ Design 12, 245–257 (2008). https://doi.org/10.1007/s10058-008-0051-x

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  • DOI: https://doi.org/10.1007/s10058-008-0051-x

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