Bargaining and inequity aversion: On the efficiency of the double auction

In a bargaining setting with asymmetrically informed, inequity-averse parties, a fully efficient mechanism (i.e., the double auction) exists if and only if compassion is strong. Less compassionate parties do not trade in the double auction in the limit of strong envy.

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Year of publication:	2012
Authors:	Rasch, Alexander ; Wambach, Achim ; Wiener, Kristina
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 114.2012, 2, p. 178-181
Publisher:	Elsevier
Subject:	Bargaining \| Double auction \| Inequity aversion \| Mechanism design \| Two-sided asymmetric information

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Type of publication:	Article
Classification:	C78 - Bargaining Theory; Matching Theory ; D44 - Auctions ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

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