Bilateral trading with contingent contracts

Research output: Contribution to journalArticlepeer-review

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
Pages (from-to)445-461
Number of pages17
JournalInternational Journal of Game Theory
Volume49
Issue number2
DOIs
Publication statusPublished - 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

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