On the possibility of efficient bilateral trade

Sanjeev Goyal

doi:10.1007/BF02716615

On the possibility of efficient bilateral trade

Sanjeev Goyal

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English (US)
Pages (from-to)	79-102
Number of pages	24
Journal	Economic Design
Volume	1
Issue number	1
DOIs	https://doi.org/10.1007/BF02716615
State	Published - Dec 1994

Keywords

Bilateral bargaining
C78
D82
D83
Ex post efficiency
Learning

ASJC Scopus subject areas

General Economics, Econometrics and Finance

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10.1007/BF02716615

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KW - Ex post efficiency

KW - Learning

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On the possibility of efficient bilateral trade

Abstract

Keywords

ASJC Scopus subject areas

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