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Optimal auctions for asymmetrically budget constrained bidders


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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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).

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  • Dominant strategy
  • Shortest path
  • Network

JEL Classification

  • C61
  • C70
  • D44