License: Creative Commons Attribution 4.0 International license (CC BY 4.0)
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DOI: 10.4230/LIPIcs.ITCS.2022.105
URN: urn:nbn:de:0030-drops-157014
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Mao, Jieming ; Paes Leme, Renato ; Wang, Kangning

Interactive Communication in Bilateral Trade

LIPIcs-ITCS-2022-105.pdf (0.7 MB)


We define a model of interactive communication where two agents with private types can exchange information before a game is played. The model contains Bayesian persuasion as a special case of a one-round communication protocol. We define message complexity corresponding to the minimum number of interactive rounds necessary to achieve the best possible outcome. Our main result is that for bilateral trade, agents don't stop talking until they reach an efficient outcome: Either agents achieve an efficient allocation in finitely many rounds of communication; or the optimal communication protocol has infinite number of rounds. We show an important class of bilateral trade settings where efficient allocation is achievable with a small number of rounds of communication.

BibTeX - Entry

  author =	{Mao, Jieming and Paes Leme, Renato and Wang, Kangning},
  title =	{{Interactive Communication in Bilateral Trade}},
  booktitle =	{13th Innovations in Theoretical Computer Science Conference (ITCS 2022)},
  pages =	{105:1--105:21},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-217-4},
  ISSN =	{1868-8969},
  year =	{2022},
  volume =	{215},
  editor =	{Braverman, Mark},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{},
  URN =		{urn:nbn:de:0030-drops-157014},
  doi =		{10.4230/LIPIcs.ITCS.2022.105},
  annote =	{Keywords: Bayesian persuasion, bilateral trade, information design}

Keywords: Bayesian persuasion, bilateral trade, information design
Collection: 13th Innovations in Theoretical Computer Science Conference (ITCS 2022)
Issue Date: 2022
Date of publication: 25.01.2022
Supplementary Material: Software (Source Code):
Software (Source Code):

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