I study a principal's optimal choice of constraint for an agent participating in an auction (or auction-like allocation mechanism). I give necessary and sufficient conditions on the principal's beliefs about the value of the item for a simple budget constraint to be the optimal contract. The...

This contribution revisits the problem of allocating R&D subsidies by government agencies. Typically, the applicants' financial constraints are private information. The literature has recommended the use of auctions in order to reduce information rents and thus improve the efficiency of how...

We study the sale of an indivisible good to liquidity constrained buyers: they cannot pay more than their “budget” regardless of their valuation. Both valuation and budget are private information. We derive the symmetric revenue maximizing and constrained efficient auctions in this setting....