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Optimal robust bilateral trade: Risk neutrality

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  • Čopič, Jernej
  • Ponsatí, Clara

Abstract

A risk neutral seller and buyer with private information bargain over an indivisible item. We prove that optimal robust bilateral trade mechanisms are payoff equivalent to non-wasteful randomized posted prices.

Suggested Citation

  • Čopič, Jernej & Ponsatí, Clara, 2016. "Optimal robust bilateral trade: Risk neutrality," Journal of Economic Theory, Elsevier, vol. 163(C), pages 276-287.
    • Handle: RePEc:eee:jetheo:v:163:y:2016:i:c:p:276-287
    DOI: 10.1016/j.jet.2015.11.008
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mustafa Ç. Pınar, 2018. "Robust trading mechanisms over 0/1 polytopes," Journal of Combinatorial Optimization, Springer, vol. 36(3), pages 845-860, October.
    2. Crawford, Vincent P., 2021. "Efficient mechanisms for level-k bilateral trading," Games and Economic Behavior, Elsevier, vol. 127(C), pages 80-101.
    3. Marek Pycia & Peter Troyan, 2021. "A theory of simplicity in games and mechanism design," ECON - Working Papers 393, Department of Economics - University of Zurich.
    4. Kneeland, Terri, 2022. "Mechanism design with level-k types: Theory and an application to bilateral trade," Journal of Economic Theory, Elsevier, vol. 201(C).
    5. Marek Pycia & Peter Troyan, 2023. "A Theory of Simplicity in Games and Mechanism Design," Econometrica, Econometric Society, vol. 91(4), pages 1495-1526, July.
    6. Kiho Yoon, 2018. "Optimal robust allocation of private goods," Discussion Paper Series 1803, Institute of Economic Research, Korea University.

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    More about this item

    Keywords

    Bilateral trade; Incomplete information; Mechanism design; Robustness; Efficiency;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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