When Might a Principal Wish to Use a Raffle to Sell a Good? Myerson Optimal Auctions, Ironing, Budget Constraints, Multidimensional Screening, and Non-Market Allocation

Deep End Era. Engineering with Sankalp · Oct 29, 2026 · 1h 9m

Everyone learns in introductory microeconomics that auctions and market-clearing prices send scarce goods to the buyers who value them most, while raffles and lotteries throw away both efficiency and revenue. Why, then, do concert halls, sneaker and GPU drops, IPO allocations, public land authorities, and even pure profit-maximizing monopolists routinely use raffles, random queues, and probabilistic bundles? In Episode 470, we walk through the deep mechanism-design mathematics of when randomization is strictly optimal for a principal: Myerson ironing when virtual valuations fail regularity…