Price and Choose

Federico Echenique and Matias Nuñez

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Abstract: We describe a sequential mechanism that fully implements the set of efficient outcomes in environments with quasi-linear utilities. The mechanism asks agents to take turns in defining prices for each outcome, with a final player choosing an outcome for all: Price & Choose. The choice triggers a sequence of payments, from each agent to the preceding agent. We present several extensions. First, payoff inequalities may be reduced by endogenizing the order of play. Second, our results extend to a model without quasi-linear utility, to a setting with an outside option, robustness to max-min behavior and caps on prices.

Keywords: Prices; Mechanism; Subgame-perfect implementation; Efficiency (search for similar items in EconPapers)
Date: 2025-05-01
New Economics Papers: this item is included in nep-des, nep-gth, nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://hal.science/hal-05511714v1
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Published in American Economic Journal: Microeconomics, 2025, 17 (2), pp.1-27. ⟨10.1257/mic.20230095⟩

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Journal Article: Price and Choose (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05511714

DOI: 10.1257/mic.20230095

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