Abstract
It is shown with an example that, in bilateral trade problems with two-sided incomplete information, some seller types may obtain higher expected payoffs in mechanisms other than the one where they make a take-it-or-leave-it offer, contrary to popular belief. If one looks at the mechanism selection problem of the (informed) seller, then the optimality of a take-it-or-leave-it offer for the seller is restored. Journal of Economic Literature Classification Numbers: C72, C78, D82.
| Language | English |
|---|---|
| Pages | 267-271 |
| Number of pages | 5 |
| Journal | Journal of Economic Theory |
| Volume | 87 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jul 1999 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Economics and Econometrics
Cite this
A note on the seller's optimal mechanism in bilateral trade with two-sided incomplete information. / Yilankaya, Okan.
In: Journal of Economic Theory, Vol. 87, No. 1, 07.1999, p. 267-271.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - A note on the seller's optimal mechanism in bilateral trade with two-sided incomplete information
AU - Yilankaya,Okan
PY - 1999/7
Y1 - 1999/7
N2 - It is shown with an example that, in bilateral trade problems with two-sided incomplete information, some seller types may obtain higher expected payoffs in mechanisms other than the one where they make a take-it-or-leave-it offer, contrary to popular belief. If one looks at the mechanism selection problem of the (informed) seller, then the optimality of a take-it-or-leave-it offer for the seller is restored. Journal of Economic Literature Classification Numbers: C72, C78, D82.
AB - It is shown with an example that, in bilateral trade problems with two-sided incomplete information, some seller types may obtain higher expected payoffs in mechanisms other than the one where they make a take-it-or-leave-it offer, contrary to popular belief. If one looks at the mechanism selection problem of the (informed) seller, then the optimality of a take-it-or-leave-it offer for the seller is restored. Journal of Economic Literature Classification Numbers: C72, C78, D82.
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UR - http://www.scopus.com/inward/citedby.url?scp=0347808848&partnerID=8YFLogxK
U2 - 10.1006/jeth.1999.2532
DO - 10.1006/jeth.1999.2532
M3 - Article
VL - 87
SP - 267
EP - 271
JO - Journal of Economic Theory
T2 - Journal of Economic Theory
JF - Journal of Economic Theory
SN - 0022-0531
IS - 1
ER -