The Pricing Mechanism to The Buyer with a Budget Constraint and an Indirect Mechanism

The present article considers the situation in which the buyer’s taste and budget are his private information. In this multi-dimensional setting, we study the optimal mechanism through a canonical mechanism in the traditional one-dimensional context: a function of one variable, the buyer’s taste. In our multi-dimensional context, however, this is an indirect mechanism. We investigate the eectiveness and limit of this indirect mechanism in the framework of the revelation principle.