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On the observational equivalence of random matching

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  • Molzon, Robert
  • Puzzello, Daniela

Abstract

Random matching is often used in economic models as a means of introducing uncertainty in sequential decision problems. We show that random matching processes that satisfy standard proportionality laws are not unique. We give conditions on the payoffs and transition functions of sequential decision models that insure that economic models are robust to the nonuniqueness of the matching process. Under these conditions, the information contained in the proportionality laws is all that is needed to know about the matching process to formulate the model.

Suggested Citation

  • Molzon, Robert & Puzzello, Daniela, 2010. "On the observational equivalence of random matching," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1283-1301, May.
    • Handle: RePEc:eee:jetheo:v:145:y:2010:i:3:p:1283-1301
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    Cited by:

    1. Duffie, Darrell & Sun, Yeneng, 2012. "The exact law of large numbers for independent random matching," Journal of Economic Theory, Elsevier, vol. 147(3), pages 1105-1139.
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    3. Duffie, Darrell & Qiao, Lei & Sun, Yeneng, 2018. "Dynamic directed random matching," Journal of Economic Theory, Elsevier, vol. 174(C), pages 124-183.
    4. Daniela Puzzello & Konrad Podczeck, 2010. "Independent random matching with many types," 2010 Meeting Papers 652, Society for Economic Dynamics.
    5. Robert Molzon, 2012. "Large Population Limits for Evolutionary Dynamics with Random Matching," Dynamic Games and Applications, Springer, vol. 2(1), pages 146-159, March.

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