Robust trading mechanisms

Kathleen M. Hagerty*, William P. Rogerson

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

55 Scopus citations

Abstract

We consider the problem of designing a trading institution for a single buyer and seller when their valuation of the good is private information. It is shown that posted-price mechanisms are essentially the only mechanisms such that each trader has a dominant strategy. A posted-price mechanism is one where a price is posted in advance and trade occurs if and only if all traders agree to trade.

Original languageEnglish (US)
Pages (from-to)94-107
Number of pages14
JournalJournal of Economic Theory
Volume42
Issue number1
DOIs
StatePublished - Jun 1987

ASJC Scopus subject areas

  • Economics and Econometrics

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