American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Price and Choose
American Economic Journal: Microeconomics
(pp. 1–27)
Abstract
We describe a sequential mechanism that fully implements the set of efficient outcomes in environments with quasi-linear utilities. The mechanism asks agents to take turns in defining prices for each outcome, with a final player choosing an outcome for all: Price and Choose. The choice triggers a sequence of payments from each agent to the preceding agent. We present several extensions. First, pay-off inequalities may be reduced by endogenizing the order of play. Second, our results extend to a model without quasi-linear utility, to a setting with an outside option, robustness to max-min behavior, and caps on prices.Citation
Echenique, Federico, and Matías Núñez. 2025. "Price and Choose." American Economic Journal: Microeconomics 17 (2): 1–27. DOI: 10.1257/mic.20230095Additional Materials
JEL Classification
- C72 Noncooperative Games
- D11 Consumer Economics: Theory
- D44 Auctions
- D71 Social Choice; Clubs; Committees; Associations
- D82 Asymmetric and Private Information; Mechanism Design