The rate of convergence to perfect competition of matching and bargaining mechanisms

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 1467

Classification and Topics

• Classification: Wirtschaft ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Bargaining Theory; Matching Theory ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: Matching and bargaining ; search ; double auctions ; foundations for perfect competition ; rate of convergence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Shneyerov, Artyom ; Wong, Adam Chi Leung
• Event: Veröffentlichung
• (who): Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
• (where): Evanston, IL
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/31237
• Last update: 10.03.2025, 11:44 AM CET