A note on the seller's optimal mechanism in bilateral trade with two-sidedincomplete information

It is shown with an example that, in bilateral trade problems with two-side d incomplete information. some seller types may obtain higher expected payo ffs in mechanisms other than the one where they make a take-it-or-leave-it offer, contrary to popular belief. It. one looks at the mechanism selection problem of the (informed) seller, then the optimality of a take-it-or-leav e-it offer for the seller is restored. Journal of Economic Literature Class ification Numbers: C72, C78, D82. (C) 1999 Academic Press.