Price and Choose

Federico Echenique and Matías Núñez

American Economic Journal: Microeconomics, 2025, vol. 17, issue 2, 1-27

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 and Choose. The choice triggers a sequence of payments from each agent to the preceding agent. We present several extensions. First, pay-off 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.

JEL-codes: C72 D11 D44 D71 D82 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/mic.20230095

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