ABSTRACT Title of dissertation: ESSAYS ON AUCTION THEORY

This dissertation studies two features of high-value auctions that are not ex-plicitly captured by the standard models in the auction theory literature. The first is that bidders in auctions for valuable assets sometimes have binding budget con-straints. Standard models of auctions assume that bidders can submit any bid up to their valuation (or willingness to pay). An existing literature has developed models where bidders may face binding budget constraints and from these models has con-cluded that the presence of budget constraints has important implications for the relative performance of different auction formats, and as a consequence argues that the presence of budget constraints should be an important factor used in choosing an auction format. Chapters 2 and 3 develop and study a model of budget constraints where the budget constraint is chosen explicitly in the model in response to a principal-agent problem between each bidder and a corresponding principal. In previous literature, the budget constraint is assumed to be given by some exogenous procedure, and hence is not affected by changes in the auction rules. The model presented here