Efficient bilateral trade with interdependent values: The use of two-stage mechanisms

• Main Authors: KUNIMOTO, Takashi, ZHANG, Cuiling
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: Bilateral trade; interdependent values; two-stage mechanisms; Economic Theory
• Online Access: https://ink.library.smu.edu.sg/soe_research/2378; https://ink.library.smu.edu.sg/context/soe_research/article/3377/viewcontent/Efficient_Bilateral_Trade_July_29_2024_full_version.pdf
• Institution: Singapore Management University

As efficient, voluntary bilateral trades are generally not incentive compatible in an interdependent-value environment (Fieseler, Kittsteiner, Moldovanu (2003) and Gresik (1991)), we seek for more positive results by employing two-stage mechanisms (Mezzetti (2004)). We say that a two-stage mechanism s...