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Robust Trading Mechanisms, Journal of Economic Theory

Abstract

We consider the problem of designing a trading institution for a single buyer and seller when their valuation of the good is private information. It is shown that posted-price mechanisms are essentially the only mechanisms such that each trader has a dominant strategy. A posted-price mechanism is one where a price is posted in advance and trade occurs if and only if all traders agree to trade.

Type

Article

Author(s)

Kathleen Hagerty, William P. Rogerson

Date Published

1987

Citations

Hagerty, Kathleen, and William P. Rogerson. 1987. Robust Trading Mechanisms. Journal of Economic Theory. 42(1): 94-107.

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