The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd


  • Robert B. Wilson
Reference work entry


Economic studies of exchange examine processes in which agents obtain gains from trade, e.g. bilateral bargaining and contracting, auctions, and multilateral markets. Prominent descriptive theories include idealized versions that assume agents simply respond to prices that clear markets. Realistic versions recognize effects of procedural rules and strategic behavior, and various impediments such as incomplete or unenforceable contracts, insufficient markets, imperfect information, and incomplete observability. Normative versions design market procedures, contract forms, and settlement rules that strengthen incentives and promote efficient outcomes.


Adverse selection Arbitrage Asymmetric information Auctions Bargaining Barter Bundling Coalitions Collusion Commitment Competition Complementary goods Complete information Cores Decentralization Double auctions Edgeworth, F. Y. Efficiency prices Efficient allocation Entry Excess demand and supply Exchange Existence of equilibria Expected utility Fixed-point problems Game theory Impatience Implicit contracts Incentive compatibility Incomplete contracts Incomplete information Incomplete observability Incomplete markets Information aggregation and prices Inside information Labour market contracts Marginal rates of substitution Market design Mechanism design Monopoly rents Moral hazard Multiple equilibria Nonlinear pricing Optimal contracts Preference falsification Price discrimination Principal and agent Prisoner’s dilemma Private information Product differentiation Quality differentiation Rational behaviour Rational expectations Reputation Resale markets Reservation prices Revelation principle Risk sharing Sealed-bid auctions Sequential rationality Shapley value Signalling Specialization Strategic behaviour Temporary equilibrium Terms of trade Uniqueness of equilibrium Vickrey, W. S. Walras, L. Walras’s Law Walrasian exchange model 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Robert B. Wilson
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