Price and Choose

Federico Echenique and Matías Núñez ()
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Federico Echenique: UC Berkeley - University of California [Berkeley] - UC - University of California
Matías Núñez: CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique

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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 & 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.

Keywords: Prices; Mechanism; Subgame-perfect implementation; Efficiency (search for similar items in EconPapers)
Date: 2025-05-01
Note: View the original document on HAL open archive server: https://hal.science/hal-05511714v1
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Published in American Economic Journal: Microeconomics, 2025, 17 (2), pp.1-27. ⟨10.1257/mic.20230095⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05511714

DOI: 10.1257/mic.20230095

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