A New Lower Bound for the Random Offerer Mechanism in Bilateral Trade using AI-Guided Evolutionary Search
The celebrated Myerson--Satterthwaite theorem shows that in bilateral trade, no mechanism can be simultaneously fully efficient, Bayesian incentive compatible (BIC), and budget balanced (BB). This naturally raises the question of how closely the gains from trade (GFT) achievable by a BIC and BB mechanism can approximate the first-best (fully efficient) benchmark. The optimal BIC and BB mechanism is typically complex and highly distribution-dependent, making it difficult to characterize directly. Consequently, much of the literature analyzes simpler mechanisms such as the Random-Offerer (RO) mechanism and establishes constant-factor guarantees relative to the first-best GFT. An important o...
| Authors | Yang Cai, Vineet Gupta, Zun Li et al. |
|---|---|
| Primary category | cs.LG |
| Published | 9 March 2026 |
| Last updated at source | 9 March 2026 |
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