Efficiency in Bargaining with Information Externalities

Bargaining is examined for the situation in which each party has private information regarding their valuation of the good as well as the value of the good to the other party. The k-double auction and the first-and-final offer bargaining game are shown not to be ex ante incentive efficient. This result contrasts with the independent private values case. A trading process based on priority pricing is shown to implement the ex ante incentive efficient mechanism.

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Year of publication:	1991
Authors:	Spulber, Daniel F.
Publisher:	Evanston, IL : Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science

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Series:	Discussion Paper ; 941R
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	hdl:10419/221300 [Handle] RePEc:nwu:cmsems:941R [RePEc]
Classification:	C7 - Game Theory and Bargaining Theory ; D82 - Asymmetric and Private Information
Source:	EconStor

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