Markov equilibria in dynamic matching and bargaining games
AbstractRubinstein and Wolinsky (1990) show that a simple homogeneous market with exogenous matching has continuum of (non-competitive) perfect equilibria, but the unique Markov perfect equilibrium is competitive. By contrast, in the more general case of heterogeneous markets, we show there exists a continuum of (non-competitive) Markov perfect equilibria. However, a refinement of the Markov property, which we call monotonicity, does suffice to guarantee perfectly competitive equilibria, if, and only if, it is monotonic. The monotonicity property is closely related to the concept of Nash equilibrium with complexity costs.
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Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 54 (2006)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/inca/622836
Other versions of this item:
- Gale, D. & Sabourian, H., 2002. "Markov Equilibria of Dynamic Matching and Bargaining Games," Working Papers 02-07, C.V. Starr Center for Applied Economics, New York University.
- Gale, D. & Sabourian, H., 2003. "Markov Equilibria in Dynamic Matching and Bargaining Games," Cambridge Working Papers in Economics 0322, Faculty of Economics, University of Cambridge.
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