Informed Principal Problems in Bilateral Trading

Takeshi Nishimura

Papers from arXiv.org

Abstract: We study bilateral trade with interdependent values as an informed-principal problem. The mechanism-selection game has multiple equilibria that differ with respect to principal's payoff and trading surplus. We characterize the equilibrium that is worst for every type of principal, and characterize the conditions under which there are no equilibria with different payoffs for the principal. We also show that this is the unique equilibrium that survives the intuitive criterion.

Date: 2019-06, Revised 2022-02
New Economics Papers: this item is included in nep-des and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1906.10311

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