| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 5060647 | Economics Letters | 2012 | 4 Pages |
Abstract
In a bargaining setting with asymmetrically informed, inequity-averse parties, a fully efficient mechanism (i.e., the double auction) exists if and only if compassion is strong. Less compassionate parties do not trade in the double auction in the limit of strong envy.
⺠We analyze bargaining with incomplete information and inequity-averse parties. ⺠A fully efficient mechanism exists if and only if compassion is strong. ⺠The double auction is a fully efficient mechanism if compassion is strong. ⺠If envy is very strong (and compassion is weak), trade breaks down completely. ⺠We numerically analyze the double-auction environment with intermediate values.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Alexander Rasch, Achim Wambach, Kristina Wiener,