On Efficient Trading Mechanisms with Ex-Post Individually Rational Traders
Stefano Galavotti ()
No 161, Working Papers from Department of Applied Mathematics, Università Ca' Foscari Venezia
This paper studies a bilateral trading setting where the two agents are not ex-ante identified, in the sense that each of them may end up being a net buyer or a net seller. We derive a sufficient condition that ensures the existence of an (ex-post) efficient, (ex-post) budget balanced, (interim) incentive compatible trading mechanism that always yields a positive net utility to all agents (ex-post individually rational). This result improves a former existence result based on interim individual rationality showing that the stronger requirement of ex-post individual rationality does not always rule out efficiency.
JEL-codes: D02 D40 D44 D82 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:vnm:wpaper:161
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