Efficient mechanisms for level-k bilateral trading

• 成果类型: Article
• 署名作者: Crawford, Vincent P.
• 署名单位: University of Oxford; University of Oxford; University of California System; University of California San Diego
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2021.02.005
• 发表日期: 2021
• 页码: 80-101
• 关键词: Mechanism design; Bilateral trading; Level-k thinking; Behavioral game theory

摘要

This paper revisits Myerson and Satterthwaite's (1983) classic analysis of mechanism design for bilateral trading, replacing equilibrium with a level-k model of strategic thinking and focusing on direct mechanisms. The revelation principle fails for level-k models, so restricting attention to direct mechanisms and imposing incentive-compatibility are not without loss of generality. If, however, only direct, level-k-incentive-compatible mechanisms are feasible and traders' levels are observable, Myerson and Satterthwaite's characterization of mechanisms that maximize traders' total surplus subject to incentive constraints generalizes qualitatively to level-kmodels. If only direct, level-k-incentive-compatible mechanisms are feasible but traders' levels are not observable, generically a particular posted-price mechanism maximizes traders' total expected surplus subject to incentive constraints. If direct, non-level-k-incentive-compatible mechanisms are feasible and traders best respond to them, total expected surplus-maximizing mechanisms may take completely different forms. (C) 2021 Elsevier Inc. All rights reserved.