Multidimensional Bargaining and Posted Prices

Hagen, M.; Hernando-Veciana, A.

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.

Citation

Hagen, M., & Hernando-Veciana, A. (2021). Multidimensional Bargaining and Posted Prices. Journal of Economic Theory, 196, Article 105317. https://doi.org/10.1016/j.jet.2021.105317

• Journal Article Type: Article
• Acceptance Date: Jul 13, 2021
• Online Publication Date: Jul 24, 2021
• Publication Date: 2021-09
• Deposit Date: Jul 15, 2021
• Publicly Available Date: Jul 25, 2023
• Journal: Journal of Economic Theory
• Print ISSN: 0022-0531
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 196
• Article Number: 105317
• DOI: https://doi.org/10.1016/j.jet.2021.105317
• Public URL: https://durham-repository.worktribe.com/output/1245058