Buyer's Equilibrium with Capacity Constraints and Restricted Mobility: a Recursive Approach
AbstractWe study a decentralized trading model as in Peters (1984), where heterogeneous market participants face a trade-o between price and trade probability. We present a novel proof of existence of a unique demand vector in Nash equilibrium, based on a recursive approach that exploits the monotonicity of matching functions.
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Bibliographic InfoPaper provided by Chapman University, Economic Science Institute in its series Working Papers with number 12-28.
Length: 19 pages
Date of creation: 2012
Date of revision:
Nash equilibrium; recursive methods; existence; heterogeneity; matching;
Other versions of this item:
- Camera, Gabriele & Kim, Jaehong, 2013. "Buyer’s equilibrium with capacity constraints and restricted mobility: A recursive approach," Economics Letters, Elsevier, vol. 118(2), pages 321-323.
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D39 - Microeconomics - - Distribution - - - Other
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
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- Peters, Michael, 1984. "Restrictions on Price Advertising," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 472-85, June.
- Selcuk, Cemil, 2012.
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- James Albrecht & Pieter Gautier, 2004. "Equilibrium Directed Search with Multiple Applications," Econometric Society 2004 Latin American Meetings 330, Econometric Society.
- James Albrecht & Pieter Gautier & Susan Vroman, 2003. "Equilibrium Directed Search with Multiple Applications," Tinbergen Institute Discussion Papers 03-004/3, Tinbergen Institute, revised 14 Feb 2004.
- Camera, Gabriele & Selcuk, Cemil, 2004.
"Price Dispersion with Directed Search,"
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1173, Purdue University, Department of Economics.
- Montgomery, James D, 1991. "Equilibrium Wage Dispersion and Interindustry Wage Differentials," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 163-79, February.
- Kenneth Burdett & Shouyong Shi & Randall Wright, 2001. "Pricing and Matching with Frictions," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 1060-1085, October.
- Peters, Michael, 1984. "Bertrand Equilibrium with Capacity Constraints and Restricted Mobility," Econometrica, Econometric Society, vol. 52(5), pages 1117-27, September.
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