Working Paper Series
Ex Post Efficiency and Individual Rationality in Incentive Compatible Trading Mechanisms
Abstract: This paper concerns the design of a trading mechanism for
a group of traders when their valuations of the good are private
information and they bargain over who shall consume more than his initial
endowment and who shall consume less. It is shown that there generally
exists a set of initial endowments of the traded commodity such that it is
possible to design a trading mechanism which is incentive compatible,
individually rational and ex post efficient.
Keywords: Efficient trading; mechanism design.; (follow links to similar papers)
JEL-Codes: O24; (follow links to similar papers)
21 pages, December 1988
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