(In)complete information bargaining - Toan Le
Tracks
Room CBE LT1
Friday, June 30, 2023 |
12:25 PM - 12:55 PM |
Overview
INCOMPLETE INFORMATION INDUSTRIAL ORGANISATION IO (Session 2)
Convenor: Simon Loertscher
Speaker
Mr Toan Le
Phd Student In Economics
The University of Melbourne
(In)complete information bargaining
Abstract
Mechanism design theory provides a range of possible outcomes of incomplete information bargaining, based on the welfare weights of the participating agents. However, it provides little guidance on how these weights are determined. This paper provides a framework for selecting bargaining weights based on Nash bargaining over ex-ante surplus. The approach involves a two-stage model for bilateral trade with independent private values. At the ex-ante stage, the agents collectively select a trading mechanism among the domain of all incentive compatible, individually rational mechanisms that requires no subsidy. The bargaining interaction between the agents, once private information is realized, is modeled as a game of incomplete information resulting from the mechanism selected. Alternative solutions such as generalized Nash, Kalai, Kalai-Smorodinsky and Rubinstein are also applicable. This framework can be extended to include multilateral trade, bargaining between partners, sanctions, $k$-double auction bargaining.
Biography
I am a 5th year PhD student in Economics at the University of Melbourne. My research interest includes mechanism design and bargaining theory.