IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v112y2022i6p2044-82.html
   My bibliography  Save this article

Bargaining with Mechanisms

Author

Listed:
  • Marcin Pęski

Abstract

Two players bargain over a single indivisible good and a transfer, with one-sided incomplete information about preferences. Both players can offer arbitrary mechanisms to determine the allocation. We show that there is a unique perfect Bayesian equilibrium outcome. In the equilibrium, one of the players proposes a menu that is optimal for the uninformed player among all menus, such that each type of the informed player receives at least her payoff under complete information. The optimal menu can be implemented with at most three allocations. Under a natural assumption on the uninformed player's beliefs, the optimal menu coincides with the Myerson's neutral solution to the bargaining problem in this environment.

Suggested Citation

  • Marcin Pęski, 2022. "Bargaining with Mechanisms," American Economic Review, American Economic Association, vol. 112(6), pages 2044-2082, June.
    • Handle: RePEc:aea:aecrev:v:112:y:2022:i:6:p:2044-82
    DOI: 10.1257/aer.20210626
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20210626
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aer.20210626.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/aer.20210626?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:112:y:2022:i:6:p:2044-82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.