Optimally constraining a bidder using a simple budget

• 成果类型: Article
• 署名作者: Burkett, Justin
• 署名单位: Wake Forest University
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE1745
• 发表日期: 2016-01-01
• 页码: 133-155
• 关键词: Budget constraints; auctions; mechanism design

摘要

I study a principal's optimal choice of constraint for an agent participating in an auction (or auction-like allocation mechanism). I give necessary and sufficient conditions on the principal's beliefs about the value of the item for a simple budget constraint to be the optimal contract. The results link the observed use of budget constraints to their use in models incorporating budget-constrained bidders. Other implications of the model are that a general revenue equivalence result applies and that the optimal auction with budget-constrained bidders has a standard solution analogous to the one for classic models.