Myerson-Satterthwaite Theorem

The Myerson–Satterthwaite Theorem states that, in a typical situation where two parties have private information about the value of a trade, it’s impossible to design a single, voluntary exchange mechanism that always results in efficient (fair and beneficial) outcomes without some risk or loss. In other words, due to private information and strategic behavior, no trade mechanism can ensure both parties always benefit and the exchange is socially optimal. This highlights fundamental limits in designing perfect markets or negotiations when parties have private, possibly conflicting, information.