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

Abstract: 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)
New Economics Papers: this item is included in nep-cta
Date: 2008-04
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http://virgo.unive.it/wpideas/storage/2008wp161.pdf First version, 2008 (application/pdf)

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Persistent link: http://EconPapers.repec.org/RePEc:vnm:wpaper:161

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