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Selected Works of Jesse A. Schwartz
Article
Robust Trading Mechanisms with Budget Surplus and Partial Trade
Economic Theory Bulletin (2018)
  • Jesse A. Schwartz
  • Quan Wen, Vanderbilt University
Link
Abstract
In a bilateral bargaining problem with private values,Hagerty and Rogerson
(J Econ Theory 42(1):94–107, 1987) showed that essentially all dominant strategy
incentive compatible, ex post individually rational, and budget balanced mechanisms
are posted-price mechanisms, where a price is drawn from a distribution, and trade
occurs if both players benefit from trading at this price. In this paper, we demonstrate
a feasible bargaining mechanism that yields more ex ante gains from trade than any
posted-price (budget balanced) mechanism.
Keywords
  • Dominant strategy implementation,
  • Vickrey-Clarke-Groves mechanisms,
  • Bilateral bargaining,
  • Budget balancedness
Disciplines
Publication Date
October, 2018
Citation Information
Jesse A. Schwartz and Quan Wen. "Robust Trading Mechanisms with Budget Surplus and Partial Trade" Economic Theory Bulletin Vol. 6 Iss. 2 (2018) p. 201 - 208
Available at: http://works.bepress.com/jesse_schwartz/13/