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Trade of a common value good

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  • Steven R. Williams

    (University of Melbourne)

Abstract

When traders have private information about a common value good, adverse selection alone is insufficient to prevent trade of the good and estimation of the common value based upon the traders’ private information. We explore sufficient conditions for nonexistence of trading mechanisms in which trade of a common good occurs, along with cases in which such mechanisms exist.

Suggested Citation

  • Steven R. Williams, 2023. "Trade of a common value good," Review of Economic Design, Springer;Society for Economic Design, vol. 27(4), pages 701-724, December.
    • Handle: RePEc:spr:reecde:v:27:y:2023:i:4:d:10.1007_s10058-022-00322-6
    DOI: 10.1007/s10058-022-00322-6
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    References listed on IDEAS

    as
    1. Holmstrom, Bengt & Myerson, Roger B, 1983. "Efficient and Durable Decision Rules with Incomplete Information," Econometrica, Econometric Society, vol. 51(6), pages 1799-1819, November.
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    4. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
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    More about this item

    Keywords

    Common value; Incentive compatibility; Ex post; Adverse selection;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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