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Matching buyers and sellers

Author

Listed:
  • Massimo A. De Francesco

    (Department of Economics, University of Siena)

Abstract

This note analyzes the repeated interaction among buyers of a homogeneous good, in a setting of imperfect buyer mobility. The buyers are assumed to play a dynamic game of imperfect information: at each stage every buyer chooses which seller to visit without knowing the current and past choices of the other buyers. A norm of conditional loyalty might prevail, according to which buyers keep loyal if previously served. Under generalized conditional loyalty, an efficient allocation is certainly reached in a finite number of stages. There is a clear case for boundedly rational buyers to keep conditionally loyal. And, most importantly, for the two-seller case we are able to establish adherence to a strategy of conditional loyalty as an “assessment equilibrium” of the dynamic buyer game.

Suggested Citation

  • Massimo A. De Francesco, 2005. "Matching buyers and sellers," Economics Bulletin, AccessEcon, vol. 3(31), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-05c70025
    as

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    File URL: http://www.accessecon.com/pubs/EB/2005/Volume3/EB-05C70025A.pdf
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    References listed on IDEAS

    as
    1. 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.
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    Cited by:

    1. De Francesco, Massimo A., 2018. "Conditional loyalty and its implications for pricing," MPRA Paper 91671, University Library of Munich, Germany, revised 26 Nov 2018.
    2. Massimo A. Francesco, 2021. "Conditional loyalty and its implications for pricing," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.

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    More about this item

    Keywords

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    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • L0 - Industrial Organization - - General

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