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… 
2 Citations

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