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, Seth Matthew

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 -