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Optimal robust bilateral trade: Risk neutrality

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  • Čopič, Jernej
  • Ponsatí, Clara

Abstract

A risk neutral seller and buyer with private information bargain over an indivisible item. We prove that optimal robust bilateral trade mechanisms are payoff equivalent to non-wasteful randomized posted prices.

Suggested Citation

  • Čopič, Jernej & Ponsatí, Clara, 2016. "Optimal robust bilateral trade: Risk neutrality," Journal of Economic Theory, Elsevier, vol. 163(C), pages 276-287.
    • Handle: RePEc:eee:jetheo:v:163:y:2016:i:c:p:276-287
    DOI: 10.1016/j.jet.2015.11.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mustafa Ç. Pınar, 2018. "Robust trading mechanisms over 0/1 polytopes," Journal of Combinatorial Optimization, Springer, vol. 36(3), pages 845-860, October.
    2. Crawford, Vincent P., 2021. "Efficient mechanisms for level-k bilateral trading," Games and Economic Behavior, Elsevier, vol. 127(C), pages 80-101.
    3. Marek Pycia & Peter Troyan, 2023. "A Theory of Simplicity in Games and Mechanism Design," Econometrica, Econometric Society, vol. 91(4), pages 1495-1526, July.
    4. Gottardi, Piero & Mezzetti, Claudio, 2024. "Shuttle diplomacy," Journal of Economic Theory, Elsevier, vol. 216(C).
    5. Kneeland, Terri, 2022. "Mechanism design with level-k types: Theory and an application to bilateral trade," Journal of Economic Theory, Elsevier, vol. 201(C).
    6. Kiho Yoon, 2018. "Optimal robust allocation of private goods," Discussion Paper Series 1803, Institute of Economic Research, Korea University.

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    More about this item

    Keywords

    Bilateral trade; Incomplete information; Mechanism design; Robustness; Efficiency;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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