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Author(s)

Alexey Malakhov

Rakesh Vohra

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.
Date Published: 2006
Citations: Malakhov, Alexey, Rakesh Vohra. 2006. Optimal Auctions for Asymmetrically Budget Constrained Bidders. Review of Economic Design.