Bilateral Trade

Bilateral trade, the exchange of goods or services between two parties, is a fundamental economic interaction increasingly studied through the lens of online learning and algorithmic mechanism design. Current research focuses on developing efficient algorithms and models, such as factorization machines and variations of the Gravity Model, to predict and optimize trade outcomes, particularly considering the impact of preferential trade agreements and fairness constraints. These advancements aim to improve the accuracy of trade flow predictions and design more equitable and efficient trading platforms, with implications for both economic modeling and the development of online marketplaces.