A Simple Bargaining Mechanism that Elicits Truthful Reservation Prices

@article{Brams2012ASB,
  title={A Simple Bargaining Mechanism that Elicits Truthful Reservation Prices},
  author={Steven J. Brams and Todd R. Kaplan and D. Marc Kilgour},
  journal={Group Decision and Negotiation},
  year={2012},
  volume={24},
  pages={401-413}
}
We describe a simple 2-stage mechanism whereby for two bargainers, a Buyer and a Seller, it is a weakly dominant strategy to report their true reservation prices in the 1st stage. If the Buyer reports a higher reservation price than the Seller, then the referee announces that there is a possibility for trade, and the bargainers proceed to make offers in a 2nd stage. The average of the 2nd-stage offers becomes the settlement if they both fall into the interval between the reported reservation… 
View on Springer
mpra.ub.uni-muenchen.de
2 Citations

2 Citations

Three procedures for inducing honesty in bargaining

This paper discusses three procedures that induce honest offers, although they necessarily fail to achieve maximum efficiency.

Mathematical Game Theory and Applications

Several classical models used in economics are presented which include Cournot, Bertrand, Hotelling, and Stackelberg as well as coverage of modern branches of game theory such as negotiation models, potential games, parlor games, and best choice games.

References

SHOWING 1-10 OF 25 REFERENCES

Three procedures for inducing honesty in bargaining

This paper discusses three procedures that induce honest offers, although they necessarily fail to achieve maximum efficiency.

Asymmetric Two-person Bargaining Under Incomplete Information: Strategic Play and Adaptive Learning

Bargaining under Incomplete Information

This paper presents and analyzes a bargaining model of bilateral monopoly under uncertainty that implies an offer strategy of each party that is monotonic in its own reservation price and depends on its assessment of the opponent's reservation price.

Bargaining procedures that induce honesty

When bargaining between two actors over an object is modeled as a noncooperative game of incomplete information, equilibrium bids generally involve misrepresentation of the players' true values. But…

Equilibrium strategies for final-offer arbitration: there is no median convergence

Final-offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement. This…

The Sealed-Bid Mechanism: An Experimental Study*

Equilibria of the Sealed- Bid Mechanism for Bargaining with Incomplete Information*, '

Efficient Mechanisms for Bilateral Trading

Binding versus final-offer arbitration: a combination is best

A new procedure is proposed for settling disputes which combines binding arbitration BA and final-offer arbitration FOA. Unlike either of the two pure procedures, combined arbitration CA induces the…

Competitive Fair Division

Several indivisible goods are to be divided among two or more players, whose bids for the goods determine their prices. An equitable assignment of the goods at competitive prices is given by a…