Fieseler, Karsten () (Sonderforschungsbereich 504) Kittsteiner, Thomas () (Sonderforschungsbereich 504) Moldovanu, Benny () (Department of Economics, University of Mannheim, Germany)
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We study the possibility of efficient trade with informationally interdependent valuations. In a model based on the bilateral trade situation studied in Myerson and Satterthwaite (1983) efficient trade is only possible in trivial cases where the seller's valuation always exceeds the buyer's valuation or vice versa. In contrast to Myerson and Satterthwaite's result, trade may not occur with probability one even though it is common knowledge that trade is always efficient. This generalizes the result of Akerlof (1970). We also analyze a generalization of the model in Cramton et al. (1987) where, ex-ante, the good is jointly owned by a partnership. In contrast to the private valuations case, we can not always find a partnership that can be dissolved efficiently. This break-down occurs even for valuation functions with arbitrary small common values components.
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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
99-71.
Length: 26 pages Date of creation: 15 Jul 1999 Date of revision: Handle: RePEc:xrs:sfbmaa:99-71
Note: Fieseler, Kittsteiner, Moldovanu: Department of Economics, University of Mannheim, Seminargebäude A5, 68131 Mannheim, Germany. We are grateful to Jörg Nikutta and seminar participants at Mannheim for helpful comments. Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. Contact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
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Roger B. Myerson, 1978.
"Optimal Auction Design,"
Discussion Papers
362, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Sandro Brusco & Giuseppe Lopomo & S Viswanathan, 2004.
"Merger Mechanisms,"
Levine's Bibliography
122247000000000379, UCLA Department of Economics.
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Stefano Comino & Antonio Nicolò & Piero Tedeschi, 2006.
"Termination Clauses in Partnerships,"
Working Papers
20060505, Università degli Studi di Milano-Bicocca, Dipartimento di Statistica.
[Downloadable!]
Helmut Bester & Karl Wärneryd, 2006.
"Conflict and the Social Contract,"
Discussion Papers
94, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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