On the possibility of efficient bilateral trade
December 1994
Article
volume 1, issue 1 pp 79-102.
| Related Files |
|---|
View PDF Version
(2008120300420.pdf, 1.3MB) |
|
Redirect to publisher's version
(publisher's version.url.txt, 36 bytes) |
I study a sequential process in which different pairs of traders bargain over the terms of trade of an indivisible good. I consider both one-sided and two-sided offers based bargaining at the stage-game level. The sequential process is modelled as an infinite stage-game of incomplete information and the paper studies the efficiency properties of its equilibria. It is shown: With one-sided offers, all equilibria are long-run ex post efficient; with two-sided offers, examples of equilibria are constructed with widely varying efficiency properties.
Keywords
Automatically Extracted Terms
- stage
- seller
- valuation
- equilibrium
- buyer
- history
- trade
- 1 / 2
- trader
- belief
- strategy
- bargaining
- offer
- stage n
- example
- result
- goyal
- efficiency
- sequence
- two-sided
