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dc.contributor.authorKargar, K.en_US
dc.contributor.authorBayrak, H. I.en_US
dc.contributor.authorPinar, M. Ç.en_US
dc.date.accessioned2019-02-21T16:01:21Z
dc.date.available2019-02-21T16:01:21Z
dc.date.issued2018en_US
dc.identifier.issn2192-4406
dc.identifier.urihttp://hdl.handle.net/11693/49823
dc.description.abstractBilateral trade problem is the most common market interaction in which a seller and a buyer bargain over an indivisible object, and the valuation of each agent about the object is private information. We investigate the cases where mechanisms satisfying Dominant Strategy Incentive Compatibility (DIC) and Ex-post Individual Rationality (EIR) properties can exhibit robust performance in the face of imprecision in prior structure. We start with the general mathematical formulation for the bilateral trade problem with DIC, EIR properties. We derive necessary and sufficient conditions for DIC, EIR mechanisms to be Ex-post efficient at the same time. Then, we define a new property—Allocation Maximality—and prove that the Posted Price mechanisms are the only mechanisms that satisfy DIC, EIR and Allocation Maximal properties. We also show that Posted Price mechanism is not the only mechanism that satisfies DIC and EIR properties. The last part of the paper introduces different sets of priors for agents’ types and consequently allows ambiguity in the problem framework. We derive robust counterparts and solve them numerically for the proposed objective function under box and ϕ-divergence ambiguity specifications. Results suggest that restricting the feasible set to Posted Price mechanisms can decrease the objective value to different extents depending on the uncertainty set.
dc.language.isoEnglish
dc.source.titleEURO Journal on Computational Optimizationen_US
dc.relation.isversionofhttps://doi.org/10.1007/s13675-018-0106-x
dc.subjectAmbiguityen_US
dc.subjectMechanism designen_US
dc.subjectRobustnessen_US
dc.subjectϕ-Divergenceen_US
dc.titleRobust bilateral trade with discrete typesen_US
dc.typeArticleen_US
dc.departmentDepartment of Industrial Engineeringen_US
dc.citation.spage367en_US
dc.citation.epage393en_US
dc.citation.volumeNumber6en_US
dc.citation.issueNumber4en_US
dc.identifier.doi10.1007/s13675-018-0106-x
dc.publisherSpringer Verlag


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