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Optimal Auctions for Asymmetrically Budget Constrained Bidders

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  • Alexey Malakhov
  • Rakesh V. Vohra

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 incentive compatible auction. We also examine the case when the budget constraint is private information but bidders must post a bond.

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  • Alexey Malakhov & Rakesh V. Vohra, 2005. "Optimal Auctions for Asymmetrically Budget Constrained Bidders," Discussion Papers 1419, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1419
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    Cited by:

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