How to allocate Research (and other) Subsidies
A budget-constrained buyer wants to purchase items from a short-listed set. Items are differentiated by observable quality and sellers have private reserve prices for their items. The buyerâ€™s problem is to select a subset of maximal quality. Money does not enter the buyerâ€™s objective function, but only his constraints. Sellers quote prices strategically, inducing a knapsack game. We derive the Bayesian optimal mechanism for the buyerâ€™s problem. We ?nd that simultaneous take-it-or-leave-it offers are optimal. Hence, somewhat surprisingly, ex-postcompetition is not required to implement optimality. Finally, we discuss the problem in a detail free setting.
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- Tilman Börgers & Peter Norman, 2009.
"A note on budget balance under interim participation constraints: the case of independent types,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(3), pages 477-489, June.
- Tilman Borgers & Peter Norman, 2005. "A Note on Budget Balance under Interim Participation Constraints: The Case of Independent Types," Levine's Bibliography 784828000000000147, UCLA Department of Economics.
- Tilman Börgers & Peter Norman, 2005. "A Note on Budget Balance under Interim Participation Constraints: The Case of Independent Types," Levine's Bibliography 784828000000000171, UCLA Department of Economics.
- Borgers, Tilman & Norman, Peter, 2005. "A Note on Budget Balance under Interim Participation Constraints: The Case of Independent Types," Microeconomics.ca working papers norman-05-02-08-08-39-42, Vancouver School of Economics, revised 23 Jun 2005.
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