The second-best bilateral trade mechanism captures at least 1/2 of first-best gains from trade, and the bound is tight.
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Buyer-offering mechanisms with reserve prices achieve a 0.746-approximation to welfare in bilateral trade, surpassing fixed-price limits.
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Second-Best Bilateral Trade is $1/2$ Efficient
The second-best bilateral trade mechanism captures at least 1/2 of first-best gains from trade, and the bound is tight.
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Welfare Maximization in Bilateral Trade: Improved Approximation Guarantees Beyond the Fixed Price Barrier
Buyer-offering mechanisms with reserve prices achieve a 0.746-approximation to welfare in bilateral trade, surpassing fixed-price limits.