Existence and Convergence of Equilibria in the Buyer's Bid Double Auction
AbstractThis paper concerns a Bayesian game model of the buyer's bid double auction, which is a procedure for organizing trade that selects a market-clearing price from a list of offers/bids. Strategic misrepresentation by traders may make the outcome of trade inefficient. M. Satterthwaite and S. Williams (1989) show that misrepresentation and inefficiency quickly converge to zero as the number of traders on each side of the market increases. This is extended here to cases in which the number of buyers may differ from the number of sellers. The existence of equilibria in a generic instance of the model is also proven. Copyright 1991 by The Review of Economic Studies Limited.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 58 (1991)
Issue (Month): 2 (April)
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