A note on the seller's optimal mechanism in bilateral trade with two-sided incomplete information

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14 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)267-271
Number of pages5
JournalJournal of Economic Theory
Volume87
Issue number1
DOIs
Publication statusPublished - Jul 1 1999

ASJC Scopus subject areas

  • Economics and Econometrics

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