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A long way coming: Designing centralized markets with privately informed buyers and sellers

Publication ,  Journal Article
Loertscher, S; Marx, LM; Wilkening, T
Published in: Journal of Economic Literature
December 1, 2015

We discuss the economics literature relevant to the design of centralized two-sided market mechanisms for environments in which both buyers and sellers have private information. The existing literature and the history of spectrum auctions, including the incentive auction currently being designed by the FCC, can be employed to analyze such mechanisms. We compare the revenue- efficiency trade-off in an environment with private information on one side of the market versus the trade-off with private information on both sides of the market; we provide an impossibility theorem for the efficient allocation of goods using a deficit-free mechanism when there is private information on both sides of the market; we discuss practical deficit-free mechanisms for various environments with two-sided private information; and we provide a synthesis to guide market design efforts and related research going forward. (JEL D44, D47, D82, H82).

Duke Scholars

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Published In

Journal of Economic Literature

DOI

ISSN

0022-0515

Publication Date

December 1, 2015

Volume

53

Issue

4

Start / End Page

857 / 897

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics
 

Citation

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Loertscher, S., Marx, L. M., & Wilkening, T. (2015). A long way coming: Designing centralized markets with privately informed buyers and sellers. Journal of Economic Literature, 53(4), 857–897. https://doi.org/10.1257/jel.53.4.857
Loertscher, S., L. M. Marx, and T. Wilkening. “A long way coming: Designing centralized markets with privately informed buyers and sellers.” Journal of Economic Literature 53, no. 4 (December 1, 2015): 857–97. https://doi.org/10.1257/jel.53.4.857.
Loertscher S, Marx LM, Wilkening T. A long way coming: Designing centralized markets with privately informed buyers and sellers. Journal of Economic Literature. 2015 Dec 1;53(4):857–97.
Loertscher, S., et al. “A long way coming: Designing centralized markets with privately informed buyers and sellers.” Journal of Economic Literature, vol. 53, no. 4, Dec. 2015, pp. 857–97. Scopus, doi:10.1257/jel.53.4.857.
Loertscher S, Marx LM, Wilkening T. A long way coming: Designing centralized markets with privately informed buyers and sellers. Journal of Economic Literature. 2015 Dec 1;53(4):857–897.

Published In

Journal of Economic Literature

DOI

ISSN

0022-0515

Publication Date

December 1, 2015

Volume

53

Issue

4

Start / End Page

857 / 897

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics