Paying the expected externality for a price quote achieves bargaining efficiency

Kaylan Chatterjee, John W. Pratt, Richard J. Zeckhauser

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

A seller and buyer have reservation prices x and y. Each has a subjective distribution on the other's reservation price. Paying an offer or the expected benefit the other participant receives from his offer induces honest price quotations, hence efficiency: sale iff y > x.

Original languageEnglish (US)
Pages (from-to)311-313
Number of pages3
JournalEconomics Letters
Volume1
Issue number4
DOIs
StatePublished - 1978

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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