Please use this identifier to cite or link to this item: http://hdl.handle.net/10263/7459
Title: Bilateral Trade and Partnership with Loss Averse Agents
Authors: Dalakoti, Harshika
Keywords: Loss Aversion
Bilateral PArtnership
Mechanism Design
Bilateral Trade
Issue Date: Jul-2023
Publisher: Indian Statistical Institute,Delhi
Citation: 90p.
Series/Report no.: ISI Ph. D Thesis;TH
Abstract: This thesis consists of three essays on bilateral trading and partnership with loss averse agents. All the three essays consider the same model where two loss averse agents (Tversky and Kahneman (1991), K ̈oszegi and Rabin (2006)) hold some shares of an asset and now want to dissolve the partnership. The first chapter shows the impossibility result for loss averse agents i.e. there does not exist a feasible, incentive compatible and individually rational mechanism which can implement an efficient outcome. The second chapter talks about the dissolution mechanism intermediated by a broker which is optimum in a sense different from ex-post efficiency. Set of all optimal mechanisms are characterised for the bilateral trade as well as partner- ship model. The third chapter shows non-existence of a dissolution mechanism which is incentive-compatible, interim individually rational, budget-balanced and efficient for equal share partnership when the degree of loss aversion exceeds a cut off, which is in contrast to Cramton et al. (1987) result
Description: This thesis is under the supervision of Prof. Debasis Mishra
URI: http://hdl.handle.net/10263/7459
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