A Trade Network Game with Endogenous Partner Selection
AbstractThis paper develops an evolutionary trade network game (TNG) that combines evolutionary game play with endogenous partner selection. Successive generations of resource-constrained buyers and sellers choose and refuse trade partners on the basis of continually updated expected payoffs. Trade partner selection takes place in accordance with a modified Gale-Shapley matching mechanism, and trades are implemented using trade strategies evolved via a standardly specified genetic algorithm. The trade partnerships resulting from the matching mechanism are shown to be core stable and Pareto optimal in each successive trade cycle. Nevertheless, computer experiments suggest that these static optimality properties may be inadequate measures of optimality from an evolutionary perspective. Related work can be accessed at: http://www.econ.iastate.edu/tesfatsi/tnghome.htm
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 1680.
Date of creation: 01 Jan 1997
Date of revision:
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
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Web page: http://www.econ.iastate.edu
More information through EDIRC
Trade network formation; evolutionary game; endogenous partner selection; iterated prisoner's dilemma; Gale-Shapley matching;
Other versions of this item:
- Leigh TESFATSION, 1995. "A Trade Network Game With Endogenous Partner Selection," Economic Report 36, Iowa State University Department of Economics.
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D4 - Microeconomics - - Market Structure and Pricing
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