an:05779693
Zbl 1232.91490
Lu, Hu; Wang, Yuntong
Efficient trading with nonlinear utility
EN
J. Math. Econ. 46, No. 4, 595-606 (2010).
00266883
2010
j
91B60 91B26 91B16
nonlinear utility; efficient trading; mechanism design
Summary: In an environment in which agents have nonlinear utility and sufficiently asymmetric initial endowments, we show that efficient trading is achievable. This result is in contrast with [\textit{R. B. Myerson} and \textit{M. A. Satterthwaite}, J. Econ. Theory 29, 265--281 (1983; Zbl 0523.90099)], which shows efficient trading is not possible if agents have linear utility and asymmetric initial endowments. Our result is also different from [\textit{P. Cramton, R. Gibbons} and \textit{P. Klemperer}, Econometrica 55, 615--632 (1987; Zbl 0632.90097)], in which they maintain the linear utility assumption as in Myerson and Satterthwaite but assume that traders' initial endowments are relatively symmetric.
Zbl 0523.90099; Zbl 0632.90097