Bilateral trading with contingent contracts

Kiho Yoon

doi:10.1007/s00182-019-00699-9

Bilateral trading with contingent contracts

Kiho Yoon

Department of Economics

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

We study the bilateral trading problem under private information. We characterize the range of possible mechanisms which satisfy ex-post efficiency, incentive compatibility, individual rationality, and budget balance. In particular, we show that the famous Myerson–Satterthwaite impossibility result no longer holds when contingent contracts are allowed.

Original language	English
Pages (from-to)	445-461
Number of pages	17
Journal	International Journal of Game Theory
Volume	49
Issue number	2
DOIs	https://doi.org/10.1007/s00182-019-00699-9
Publication status	Published - 2020 Jun 1

Keywords

Bilateral trading
Contingent contracts
Ex-post efficiency
Linear contracts
Royalty contracts

ASJC Scopus subject areas

Statistics and Probability
Mathematics (miscellaneous)
Social Sciences (miscellaneous)
Economics and Econometrics
Statistics, Probability and Uncertainty

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10.1007/s00182-019-00699-9

Cite this

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author = "Kiho Yoon",

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N2 - We study the bilateral trading problem under private information. We characterize the range of possible mechanisms which satisfy ex-post efficiency, incentive compatibility, individual rationality, and budget balance. In particular, we show that the famous Myerson–Satterthwaite impossibility result no longer holds when contingent contracts are allowed.

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KW - Ex-post efficiency

KW - Linear contracts

KW - Royalty contracts

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Bilateral trading with contingent contracts

Abstract

Keywords

ASJC Scopus subject areas

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