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Multidimensional bargaining and posted prices

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URI: https://hdl.handle.net/10016/35479
ISSN: 0022-0531
DOI: https://doi.org/10.1016/j.jet.2021.105317
UXXI: AR/0000029302
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multidimensional_JET_2021_ps.pdf (611.58 KB)
suplementary_material_JET_2021.pdf (270.81 KB)
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2021-09-01
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Elsevier
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Abstract
A seller and a buyer bargain over the quantities and prices of multiple goods. Both agents have private information about their preferences. Utility is quasilinear in money. We show that a deterministic mechanism satisfies (i) dominant-strategy incentive compatibility, (ii) ex-post individual rationality and (iii) ex-post budget balance if and only if it is a posted-price mechanism. A similar, more general result holds if (iii) is replaced by ex-post collusion-proofness and a no-free lunch condition. We provide a unified proof of both findings via the property of non-bossiness.
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Mechanism design, Bilateral trade, Multidimensional private information, Posted prices, Dominant strategies, Collusion-proofness
Bibliographic citation
Hagen, M., & Hernando-Veciana, Á. (2021). Multidimensional bargaining and posted prices. Journal of Economic Theory, 196, p. 105317.
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