TY - GEN
T1 - The optimal mechanism for selling to a budget-constrained buyer
T2 - 18th ACM Conference on Economics and Computation, EC 2017
AU - Devanur, Nikhil R.
AU - Weinberg, S. Matthew
N1 - Publisher Copyright:
© 2017 ACM.
PY - 2017/6/20
Y1 - 2017/6/20
N2 - We consider a revenue-maximizing seller with a single item facing a single buyer with a private budget. .e (value, budget) pair is drawn from an arbitrary and possibly correlated distribution. We characterize the optimal mechanism in such cases, and quantify the amount of price discrimination that might be present. For example, there could be up to 3 . 2k-1- 1 distinct non-Trivial menu options in the optimal mechanism for such a buyer with k distinct possible budgets (compared to k if the marginal distribution of values conditioned on each budget has decreasing marginal revenue [CG00], or 2 if there is an arbitrary distribution and one possible budget [CMM11]). Our approach makes use of the duality framework of [CDW16], and duality techniques related to the "FedEx Problem" of [FGKK16]. In contrast to [FGKK16] and other prior work, we characterize the optimal primal/dual without nailing down an explicit closed form.
AB - We consider a revenue-maximizing seller with a single item facing a single buyer with a private budget. .e (value, budget) pair is drawn from an arbitrary and possibly correlated distribution. We characterize the optimal mechanism in such cases, and quantify the amount of price discrimination that might be present. For example, there could be up to 3 . 2k-1- 1 distinct non-Trivial menu options in the optimal mechanism for such a buyer with k distinct possible budgets (compared to k if the marginal distribution of values conditioned on each budget has decreasing marginal revenue [CG00], or 2 if there is an arbitrary distribution and one possible budget [CMM11]). Our approach makes use of the duality framework of [CDW16], and duality techniques related to the "FedEx Problem" of [FGKK16]. In contrast to [FGKK16] and other prior work, we characterize the optimal primal/dual without nailing down an explicit closed form.
KW - Budgets
KW - Revenue maximization
UR - http://www.scopus.com/inward/record.url?scp=85025804825&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85025804825&partnerID=8YFLogxK
U2 - 10.1145/3033274.3085132
DO - 10.1145/3033274.3085132
M3 - Conference contribution
AN - SCOPUS:85025804825
T3 - EC 2017 - Proceedings of the 2017 ACM Conference on Economics and Computation
SP - 39
EP - 40
BT - EC 2017 - Proceedings of the 2017 ACM Conference on Economics and Computation
PB - Association for Computing Machinery, Inc
Y2 - 26 June 2017 through 30 June 2017
ER -