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 language | English (US) |
---|---|
Pages (from-to) | 94-107 |
Number of pages | 14 |
Journal | Journal of Economic Theory |
Volume | 42 |
Issue number | 1 |
DOIs | |
State | Published - Jun 1987 |
Funding
* We would like to acknowledge extremely helpful comments and discussions with Roger Myerson. Rogerson’s work was supported by NSF Grant SES-8504034. ’ See D’Aspermont and Gerard-Varet [2], Laffont and Maskin [S], Myerson [6], Vickery [9], and Wilson [lo, 11, 121 for related literature.
ASJC Scopus subject areas
- Economics and Econometrics