Mechanism design with financially constrained agents and costly verification
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
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Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 1139-1194 |
| Journal / Publication | Theoretical Economics |
| Volume | 16 |
| Issue number | 3 |
| Publication status | Published - 26 Jul 2021 |
Link(s)
| DOI | DOI |
|---|---|
| Attachment(s) | Documents
Publisher's Copyright Statement
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| Link to Scopus | https://www.scopus.com/record/display.uri?eid=2-s2.0-85111334964&origin=recordpage |
| Permanent Link | https://scholars.cityu.edu.hk/en/publications/publication(f89b4a4d-d1f7-4fba-aaf2-bf5596144f69).html |
Abstract
A principal distributes an indivisible good to budget-constrained agents when
both valuation and budget are agents’ private information. The principal can verify an agent’s budget at a cost. The welfare-maximizing mechanism can be implemented via a two-stage scheme. First, agents report their budgets, receive cash
transfers, and decide whether to enter a lottery over the good. Second, recipients
of the good can sell it on a resale market but must pay a sales tax. Low-budget
agents receive a higher cash transfer, pay a lower price to enter the lottery, and
face a higher sales tax. They are also randomly inspected.
Research Area(s)
- Mechanism design, budget constraints, efficiency, costly verification
Citation Format(s)
Mechanism design with financially constrained agents and costly verification. / LI, Yunan.
In: Theoretical Economics, Vol. 16, No. 3, 26.07.2021, p. 1139-1194.
In: Theoretical Economics, Vol. 16, No. 3, 26.07.2021, p. 1139-1194.
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
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