Bilateral trading with contingent contracts

Kiho Yoon

International Journal of Game Theory, 2020, vol. 49, issue 2, No 4, 445-461

Abstract: Abstract We study the bilateral trading problem under private information. We characterize the range of possible mechanisms which satisfy ex-post efficiency, incentive compatibility, individual rationality, and budget balance. In particular, we show that the famous Myerson–Satterthwaite impossibility result no longer holds when contingent contracts are allowed.

Keywords: Bilateral trading; Contingent contracts; Ex-post efficiency; Linear contracts; Royalty contracts (search for similar items in EconPapers)
JEL-codes: C72 D47 D82 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00182-019-00699-9

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