Multidimensional bargaining and posted prices Articles uri icon

publication date

  • September 2021

start page

  • 105317

end page

  • 105346

volume

  • 196

International Standard Serial Number (ISSN)

  • 0022-0531

Electronic International Standard Serial Number (EISSN)

  • 1095-7235

abstract

  • A seller and a buyer bargain over the quantities and prices of multiple goods. Both agents have private information about their preferences. Utility is quasilinear in money. We show that a deterministic mechanism satisfies (i) dominant-strategy incentive compatibility, (ii) ex-post individual rationality and (iii) ex-post budget balance if and only if it is a posted-price mechanism. A similar, more general result holds if (iii) is replaced by ex-post collusion-proofness and a no-free lunch condition. We provide a unified proof of both findings via the property of non-bossiness.

keywords

  • mechanism design; bilateral trade; multidimensional private information; posted prices; dominant strategies; collusion-proofness