Myerson-Satterthwaite theorem

Myerson-Satterthwaite Theorem

Myerson-Satterthwaite theorem

to get instant updates about 'Myerson-Satterthwaite Theorem' on your MyPage. Meet other similar minded people. Its Free!


All Updates

The Myerson-Satterthwaite theorem is an important result in mechanism design and the economics of asymmetric information, due to Roger Myerson and Mark Satterthwaite. Informally, the result says that there is no efficient way for two parties to trade a good when they each have secret and probabilistically varying valuations for it, without the risk of forcing one party to trade at a loss.

Formally, the theorem applies if a prospective buyer A has a valuation <math>v_A in </math>, and the prospective seller B has an independent valuation <math>v_B in </math>, such that the intervals <math></math> and <math></math> overlap, and the probability densities for the valuations are strictly positive on those intervals. Under those conditions, there is no Bayesian incentive compatible social choice function that is guaranteed in advance to produce efficient outcomes and guarantees buyers and sellers non-negative returns regardless of <math>v_a</math> and <math>v_b</math>.

The Myerson-Satterthwaite theorem is among the most remarkable and universally applicable negative results in economics &mdash; a kind of negative mirror to the fundamental theorems of welfare economics. It is, however, much less famous than those results or Arrow's earlier result on the impossibility of satisfactory electoral systems.


Read More

No feeds found

Posting your question. Please wait!...

No updates available.
No messages found
Suggested Pages
Tell your friends >
about this page
 Create a new Page
for companies, colleges, celebrities or anything you like.Get updates on MyPage.
Create a new Page
 Find your friends
  Find friends on MyPage from