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 |
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Pages (from-to) | 445-461 |
Number of pages | 17 |
Journal | International Journal of Game Theory |
Volume | 49 |
Issue number | 2 |
DOIs | |
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