Abstract
We describe a simple 2-stage mechanism whereby for two bargainers, a Buyer and a Seller, it is a weakly dominant strategy to report their true reservation prices in the 1st stage. If the Buyer reports a higher reservation price than the Seller, then the referee announces that there is a possibility for trade, and the bargainers proceed to make offers in a 2nd stage. The average of the 2nd-stage offers becomes the settlement if they both fall into the interval between the reported reservation prices; if only one offer falls into this interval, it is the settlement, but it is implemented with probability $$\frac{1}{2}$$12; if neither offer falls into the interval, there is no settlement. Comparisons are made with other bargaining mechanisms.
| Original language | English |
|---|---|
| Pages (from-to) | 401-413 |
| Number of pages | 13 |
| Journal | Group Decision and Negotiation |
| Volume | 24 |
| Issue number | 3 |
| DOIs | |
| State | Published - 1 May 2015 |
Bibliographical note
Publisher Copyright:© 2014, Springer Science+Business Media Dordrecht.
Keywords
- Bargaining
- Incomplete information
- Probabilistic implementation
- Truth-telling mechanisms
ASJC Scopus subject areas
- General Decision Sciences
- Arts and Humanities (miscellaneous)
- General Social Sciences
- Strategy and Management
- Management of Technology and Innovation