The Myerson-Satterthwaite Theorem

The Myerson-Satterthwaite Theorem addresses a fundamental issue in negotiations and trading between two parties, each of whom has different valuations for an item. It demonstrates that, without extra tools like monetary compensation, it is impossible for both parties to reach an agreement that benefits them both when their valuations differ. In essence, if one person values something more than the other, they can't find a way to trade that ensures both sides are satisfied without transferring money or other resources, leading to potential inefficiencies in market transactions.