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Multidimensional bargaining and posted prices

Martin Hagen () and Angel Hernando-Veciana ()

Journal of Economic Theory, 2021, vol. 196, issue C

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.

Keywords: Mechanism design; Bilateral trade; Multidimensional private information; Posted prices; Dominant strategies; Collusion-proofness (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:196:y:2021:i:c:s0022053121001344

DOI: 10.1016/j.jet.2021.105317

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