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Limits of Exact Equilibria for Capacity Constrained Sellers with costlySearch

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  • Michael Peters

Abstract

The paper contrasts the exact equilibria of games where sellers compete in price with the rational expectations equilibria of these games. It is shown that the distribution of prices offered by sellers in both the exact and rational expectations equilibrium converge weakly to the same limit as the number of buyers and sellers grows large. Furthermore, the payoffs that sellers face in both kinds of equilibrium have the market utility property in the limit.

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File URL: http://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-PETERS-98-01.ps
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File URL: http://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-PETERS-98-01.pdf
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Download Restriction: no

Bibliographic Info

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number peters-98-01.

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Length: 24 pages
Date of creation: 11 Jul 1998
Date of revision:
Handle: RePEc:tor:tecipa:peters-98-01

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  1. Peters, Michael & Severinov, Sergei, 1997. "Competition among Sellers Who Offer Auctions Instead of Prices," Journal of Economic Theory, Elsevier, vol. 75(1), pages 141-179, July.
  2. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 385-411, April.
  3. Peters, Michael, 1997. "On the Equivalence of Walrasian and Non-Walrasian Equilibria in Contract Markets: The Case of Complete Contracts," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 241-64, April.
  4. Douglas Gale, 1994. "Equilibria and Pareto Optima of Markets with Adverse Selection," Papers 0046, Boston University - Industry Studies Programme.
  5. Michael Peters, 1995. "A Competitive Distribution of Auctions," Working Papers peters-95-03, University of Toronto, Department of Economics.
  6. Acemoglu, D. & Shimer, R., 1997. "Efficient Unemployment Insurance," Working papers 97-9, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Kenneth Burdett & Shouyong Shi & Randall Wright, 1998. "Pricing with frictions," Working Papers 98-9, Federal Reserve Bank of Philadelphia.
  8. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
  9. Ehud Kalai & Ehud Lehrer, 1991. "Subjective Equilibrium in Repeated Games," Discussion Papers 981, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. James Bergin & Dan Bernhardt, 1989. "Anonymous Sequential Games with Aggregate Uncertainty," Working Papers 760, Queen's University, Department of Economics.
  11. Gale, Douglas, 1992. "A Walrasian Theory of Markets with Adverse Selection," Review of Economic Studies, Wiley Blackwell, vol. 59(2), pages 229-55, April.
  12. Carlton, Dennis W, 1978. "Market Behavior with Demand Uncertainty and Price Inflexibility," American Economic Review, American Economic Association, vol. 68(4), pages 571-87, September.
  13. Gould, John P, 1978. "Inventories and Stochastic Demand: Equilibrium Models of the Firm and Industry," The Journal of Business, University of Chicago Press, vol. 51(1), pages 1-42, January.
  14. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
  15. Peters, Michael, 1984. "Bertrand Equilibrium with Capacity Constraints and Restricted Mobility," Econometrica, Econometric Society, vol. 52(5), pages 1117-27, September.
  16. Wilson, Robert B, 1989. "Efficient and Competitive Rationing," Econometrica, Econometric Society, vol. 57(1), pages 1-40, January.
  17. 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.
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