Bilateral trading with contingent contracts

Research output: Contribution to journalArticle

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 languageEnglish
JournalInternational Journal of Game Theory
DOIs
Publication statusAccepted/In press - 2019 Jan 1

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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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