Robust trading mechanisms

Robust trading mechanisms

We consider the problem of designing a trading institution for a single buyer and seller when their valuation of the good is private information. It is shown that posted-price mechanisms are essentially the only mechanisms such that each trader has a dominant strategy. A posted-price mechanism is on...

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Veröffentlicht in:Journal of economic theory 1987-06, Vol.42 (1), p.94-107
Hauptverfasser: Hagerty, Kathleen M, Rogerson, William P
Format: Artikel
Sprache:eng
Schlagworte:
Trade
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Zusammenfassung:We consider the problem of designing a trading institution for a single buyer and seller when their valuation of the good is private information. It is shown that posted-price mechanisms are essentially the only mechanisms such that each trader has a dominant strategy. A posted-price mechanism is one where a price is posted in advance and trade occurs if and only if all traders agree to trade.
ISSN:0022-0531
1095-7235
DOI:10.1016/0022-0531(87)90104-9