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http://hdl.handle.net/10419/31237
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| Title: | | The rate of convergence to perfect competition of matching and bargaining mechanisms  |
| Authors: | | Shneyerov, Artyom Wong, Adam Chi Leung |
| Issue Date: | | 2008 |
| Series/Report no.: | | Discussion paper // Center for Mathematical Studies in Economics and Management Science 1467 |
| Abstract: | | We study the steady state of a market with incoming cohorts of buyers and sellers who are matched pairwise and bargain under private information. We first consider generalized random-proposer take-it-or-leave-it offer games (GRP TIOLI games). This class of games includes a simple random-proposer TIOLI game, but also many other interesting bargaining games. A friction parameter is t , the length of the time period until the next meeting. We find that as t - O, all market equilibria converge to the Walrasian limit, at the fastest possible rate O(t) among all bargaining mechanisms. Some important bargaining games not in this class may have non-convergent market equilibria. This is the case for the k-double auction: we find that there are equilibria that converge at a linear rate, those that converge at a slower rate or even not converge at all. |
| Subjects: | | Matching and bargaining search double auctions foundations for perfect competition rate of convergence |
| JEL: | | C73 C78 D83 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Discussion Papers, Kellogg School of Management, Northwestern University
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