Efficiency with(out) intermediation in repeated bilateral trade
This paper analyzes repeated version of the bilateral trade model where the independent payoff relevant private information of the buyer and the seller is correlated across time. Using this setup it makes the following five contributions. First, it derives necessary and sufficient conditions on the primitives of the model as to when efficiency can be attained under ex post budget balance and participation constraints. Second, in doing so, it introduces an intermediate notion of budget balance called interim budget balance that allows for the extension of liquidity but with participation constraints for the issuing authority interpreted here as an intermediary. Third, it pins down the class of all possible mechanisms that can implement the efficient allocation with and without an intermediary. Fourth, it provides a foundation for the role of an intermediary in a dynamic mechanism design model under informational constraints. And, fifth, it argues for a careful interpretation of the "folk proposition" that less information is better for efficiency in dynamic mechanisms under ex post budget balance and observability of transfers.
Code (0)
등록된 구현이 없습니다.
Similar Papers 제목 키워드 기반
Estimating Digital Product Trade through Corporate Revenue Data
Despite global efforts to harmonize international trade statistics, our understanding of digital trade and its implications remains limited. Here, we introduce a method to estimate bilateral exports and imports for dozen…
Repeated Bilateral Trade Against a Smoothed Adversary
We study repeated bilateral trade where an adaptive $\sigma$-smooth adversary generates the valuations of sellers and buyers. We provide a complete characterization of the regret regimes for fixed-price mechanisms under …
Repeated Bilateral Trade: The Quest for Fairness
We study repeated bilateral trade from a fairness perspective. At each round, a fresh seller-buyer pair arrives, and the platform posts a price before observing the traders' valuations. Trade occurs only if both agents a…
Contextual Online Bilateral Trade
We study repeated bilateral trade when the valuations of the sellers and the buyers are contextual. More precisely, the agents' valuations are given by the inner product of a context vector with two unknown $d$-dimension…
Flattening Supply Chains: When do Technology Improvements lead to Disintermediation?
In the digital economy, technological innovations make it cheaper to produce high-quality content. For example, generative AI tools reduce costs for creators who develop content to be distributed online, but can also red…