Competitive and Revenue-Optimal Pricing with Budgets
Theoretical Economics
2025-04-09 v3 Computer Science and Game Theory
Abstract
In markets with budget-constrained buyers, competitive equilibria need not be efficient in the utilitarian sense, or maximise 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.
Keywords
Cite
@article{arxiv.2310.03692,
title = {Competitive and Revenue-Optimal Pricing with Budgets},
author = {Simon Finster and Paul W. Goldberg and Edwin Lock},
journal= {arXiv preprint arXiv:2310.03692},
year = {2025}
}
Comments
Accepted at WINE'23 conference and Theoretical Economics