The Pricing Mechanism to The Buyer with a Budget Constraint and an Indirect Mechanism

Naoki KOJIMA ()

Economics and Finance Discussion Papers from Economics and Finance Section, School of Social Sciences, Brunel University

Abstract: The present article considers the situation in which the buyer’s taste and budget are his private information. In this multi-dimensional setting, we study the optimal mechanism through a canonical mechanism in the traditional one-dimensional context: a function of one variable, the buyer’s taste. In our multi-dimensional context, however, this is an indirect mechanism. We investigate the eectiveness and limit of this indirect mechanism in the framework of the revelation principle.

Date: 2005-03
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Persistent link: http://EconPapers.repec.org/RePEc:bru:bruedp:05-07

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