The Optimal Mechanism for Selling to Budget-Constrained Consumers
AbstractThis paper finds an optimal mechanism for selling an indivisible good to consumers who may be budget-constrained. Unlike the case where buyers are not budget constrained, a single posted price is not typically optimal. An optimal mechanism generally consists of a continuum of lotteries indexed by the probability of comsumption and the entry fee.
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Bibliographic InfoPaper provided by Wisconsin Madison - Social Systems in its series Working papers with number 9415r.
Length: 21 pages
Date of creation: 1995
Date of revision:
Contact details of provider:
Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.
Other versions of this item:
- Che, Y.K. & Gale, I., 1996. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9609, Wisconsin Madison - Social Systems.
- Che, Y.K. & Gale, I.,, 1994. "The Optimal Mechanism for Selling to Budget-Constrained Consumers," Working papers 9415, Wisconsin Madison - Social Systems.
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- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- Mark Armstrong & David Sappington, 2005.
"Regulation, Competition and Liberalization,"
0505011, EconWPA, revised 07 Oct 2005.
- GAUTIER, Axel & MITRA, Manipushpak, 2003.
"Financing infrastructure under budget constraints,"
CORE Discussion Papers
2003037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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