Competitive and revenue‐optimal pricing with budgets
Copyright policy )Competitive and revenue‐optimal pricing with budgets
In markets with budget‐constrained buyers, competitive equilibria need not be efficient in the utilitarian sense or maximize the seller's revenue. We consider a setting with multiple divisible goods. Competitive equilibrium outcomes, and only those, are constrained utilitarian efficient, a notion of utilitarian efficiency that respects buyers' demands and budgets. Our main contribution establishes that when buyers have linear valuations, competitive equilibrium prices are unique and revenue‐optimal for a zero‐cost seller.
FOS: Computer and information sciences, market design, Competitive equilibrium, budget constraints, Fisher markets, product-mix auctions, FOS: Economics and business, revenue maximisation, efficiency, Computer Science - Computer Science and Game Theory, product-mix auction, [INFO.INFO-GT] Computer Science [cs]/Computer Science and Game Theory [cs.GT], Economics - Theoretical Economics, Theoretical Economics (econ.TH), arctic auction, revenue maximization, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Arctic auction, competitive equilibrium, Computer Science and Game Theory (cs.GT)
FOS: Computer and information sciences, market design, Competitive equilibrium, budget constraints, Fisher markets, product-mix auctions, FOS: Economics and business, revenue maximisation, efficiency, Computer Science - Computer Science and Game Theory, product-mix auction, [INFO.INFO-GT] Computer Science [cs]/Computer Science and Game Theory [cs.GT], Economics - Theoretical Economics, Theoretical Economics (econ.TH), arctic auction, revenue maximization, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, Arctic auction, competitive equilibrium, Computer Science and Game Theory (cs.GT)
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