Artikel

Efficiency in repeated trade with hidden valuations

We analyze the extent to which efficient trade is possible in an ongoing relationship between impatient agents with hidden valuations (i.i.d. over time), restricting attention to equilibria that satisfy ex post incentive constraints in each period. With ex ante budget balance, efficient trade can be supported in each period if the discount factor is at least one half. In contrast, when the budget must balance ex post, efficiency is not attainable, and furthermore for a wide range of probability distributions over their valuations, the traders can do no better than employing a posted price mechanism in each period. Between these extremes, we consider a "bank'' that allows the traders to accumulate budget imbalances over time, but only within a bounded range. We construct non-stationary equilibria that allow traders to receive payoffs that approach efficiency as their discount factor approaches one, while the bank earns exactly zero expected profits. For some probability distributions there exist equilibria that yield exactly efficient payoffs for the players and zero profits for the bank, but such equilibria require high discount factors.

Sprache
Englisch

Erschienen in
Journal: Theoretical Economics ; ISSN: 1555-7561 ; Volume: 2 ; Year: 2007 ; Issue: 3 ; Pages: 299-354 ; New York, NY: The Econometric Society

Klassifikation
Wirtschaft
Noncooperative Games
Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
Asymmetric and Private Information; Mechanism Design
Transactional Relationships; Contracts and Reputation; Networks
Thema
Repeated trade
Myerson-Satterthwaite Theorem
repeated games
private information
dynamic mechanism design
ex post incentive compatibility
budget balance

Ereignis
Geistige Schöpfung
(wer)
Athey, Susan
Miller, David A.
Ereignis
Veröffentlichung
(wer)
The Econometric Society
(wo)
New York, NY
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Artikel

Beteiligte

  • Athey, Susan
  • Miller, David A.
  • The Econometric Society

Entstanden

  • 2007

Ähnliche Objekte (12)