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Dynamic matching and bargaining games: A general approach

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  • Lauermann, Stephan

Abstract

This paper presents a new characterization result for competitive allocations in quasilinear economies. This result is informed by the analysis of non-cooperative dynamic search and bargaining games. Such games provide models of decentralized markets with trading frictions. A central objective of this literature is to investigate how equilibrium outcomes depend on the level of the frictions. In particular, does the trading outcome become Walrasian when frictions become small? Existing specifications of such games provide divergent answers. The characterization result is used to investigate what causes these differences and to generalize insights from the analysis of specific search and bargaining games.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31717.

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Date of creation: 11 Mar 2011
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Handle: RePEc:pra:mprapa:31717

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Keywords: Dynamic Matching and Bargaining; Decentralized Markets; Non-cooperative Foundations of Competitive Equilibrium; Search Theory;

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