Optimal Trading Mechanisms for an Informed Seller

Rolf Tisljar

No 33/2002, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: We consider the situation where the owner of some good wants to sell the good to one of several potential buyers. We assume that the owner possesses private information about the buyers' valuations of the good, and analyze this model as an informed principal mechanism design model. In an undominated perfect Bayesian equilibrium of the model the seller gives the object to the person who values the object most, and receives a transfer payment from each potential buyer such that all ex-ante expected rents are extracted from the buyers.

Keywords: informed principal; mechanism design (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:332002

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