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The Exact Welfare Guarantee of Fixed-Price Bilateral Trade

Lin, Tingyi et al.
arXiv (All) · Papers
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computer-science-and-game-theorytheoretical-economics
A seller and a buyer with independent private values can trade only at a posted price. We determine the worst case of this mechanism exactly: the best posted price always guarantees a $β_*=0.738024...$ fraction of first-best welfare, where $β_*$ is the root of an explicit equation, the worst-case bu
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