Efficient Sequential Bargaining
Lawrence M. Ausubel and Raymond Deneckere
,
2
(
60
)
Review of Economic Studies
435-461
April
1993
Abstract
Suppose that a seller and a buyer have private valuations for a good, and that their respective utilities from a trading mechanism are given by usand ub. (These utilities are determined by the valuation for the good, by whether a trade occurs, and by the price which is paid.) Consider the problem of maximizing E[λus + (1 − λ)ub] for some weight λ in the unit interval.