Selling to a manager and a budget-constrained agent
Article Type
Research Article
Publication Title
Journal of Mathematical Economics
Abstract
We analyze a model of selling a single object to a manager-agent pair who want to acquire the object for a firm. The manager and the agent have different assessments of the object's value to the firm. The agent is budget-constrained while the manager is not. The agent participates in the mechanism, but she can (strategically) approach the manager for decision-making. We derive the revenue-maximizing mechanism in a two-dimensional type space (values of the agent and the manager). We show that below a threshold budget, a mechanism involving two posted prices and three outcomes (one of which involves randomization) is the optimal mechanism for the seller. Otherwise, a single posted price mechanism is optimal.
DOI
10.1016/j.jmateco.2024.103062
Publication Date
12-1-2024
Recommended Citation
Mishra, Debasis and Paramahamsa, Kolagani, "Selling to a manager and a budget-constrained agent" (2024). Journal Articles. 5071.
https://digitalcommons.isical.ac.in/journal-articles/5071