Price and Choose

Federico Echenique and Matías Núñez

Department of Economics, Working Paper Series from Department of Economics, Institute for Business and Economic Research, UC Berkeley

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, 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. (JEL C72, D11, D44, D71, D82)

Keywords: Economics; Applied Economics; Economic Theory; Banking; finance and investment; Applied economics; Economic theory (search for similar items in EconPapers)
Date: 2025-05-01
New Economics Papers: this item is included in nep-des and nep-mic
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