Bilateral trade with risk-averse intermediary using linear network optimization

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buir.contributor.authorBayrak, Halil İ.
buir.contributor.authorKargar, Kamyar
buir.contributor.authorPınar, Mustafa Ç.
dc.citation.epage332en_US
dc.citation.issueNumber4en_US
dc.citation.spage325en_US
dc.citation.volumeNumber74en_US
dc.contributor.authorBayrak, Halil İ.en_US
dc.contributor.authorKargar, Kamyaren_US
dc.contributor.authorPınar, Mustafa Ç.en_US
dc.date.accessioned2020-02-11T06:45:22Z
dc.date.available2020-02-11T06:45:22Z
dc.date.issued2019
dc.departmentDepartment of Industrial Engineeringen_US
dc.description.abstractWe consider bilateral trade of an object between a seller and a buyer through an intermediary who aims to maximize his/her expected gains as in the previous study, in a Bayes‐Nash equilibrium framework where the seller and buyer have private, discrete valuations for the object. Using duality of linear network optimization, the intermediary's initial problem is transformed into an equivalent linear programming problem with explicit formulae of expected revenues of the seller and the expected payments of the buyer, from which the optimal mechanism is immediately obtained. Then, an extension of the same problem is considered for a risk‐averse intermediary. Through a computational analysis, we observe that the structure of the optimal mechanism is fundamentally changed by switching from risk‐neutral to risk‐averse environment.en_US
dc.embargo.release2020-12-01
dc.identifier.doi10.1002/net.21910en_US
dc.identifier.issn0028-3045
dc.identifier.urihttp://hdl.handle.net/11693/53249
dc.language.isoEnglishen_US
dc.publisherWiley Periodicals, Inc.en_US
dc.relation.isversionofhttps://doi.org/10.1002/net.21910en_US
dc.source.titleNetworksen_US
dc.subjectBilateral intermediated tradeen_US
dc.subjectLinear network optimizationen_US
dc.subjectRisk‐aversionen_US
dc.subjectShortest path dualityen_US
dc.titleBilateral trade with risk-averse intermediary using linear network optimizationen_US
dc.typeArticleen_US
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