Efficient trading with nonlinear utility
AbstractIn an environment in which agents have nonlinear utility and sufficiently asymmetric initial endowments, we show that efficient trading is achievable. This result is in contrast with Myerson and Satterthwaite (1983), which shows efficient trading is not possible if agents have linear utility and asymmetric initial endowments. Our result is also different from Cramton et al. (1987), in which they maintain the linear utility assumption as in Myerson and Satterthwaite but assume that traders' initial endowments are relatively symmetric.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Mathematical Economics.
Volume (Year): 46 (2010)
Issue (Month): 4 (July)
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Web page: http://www.elsevier.com/locate/jmateco
Nonlinear utility Efficient trading Mechanism design;
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