Preprint
Sep 2026
Sharp Second-Best Welfare in Bilateral and Matching Markets
How much social welfare must a market lose because values are private? We determine the sharp ratio of second-best to first-best welfare under independent nonnegative types, Bayesian incentive compatibility, interim individual rationality, and no expected budget deficit. The ratio is approximately $0.8882516903$ for ar...
Zheng-Yang Liu, Ying Qin, Zi-He Wang
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