Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253504 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 16 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2021 [Pages:] 1139-1194
Publisher: 
The Econometric Society, New Haven, CT
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.
Subjects: 
Mechanism design
budget constraints
efficiency
costly verification
JEL: 
D45
D61
D82
H42
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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