IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Mistakes in Cooperation: the Stochastic Stability of Edgeworth's Recontracting

  • Roberto Serrano
  • Oscar Volij

We analyse a dynamic trading process of coalitional recontracting in an exchange economy with indivisible goods, where agents may make mistakes with small probability. According to this process, the resistance of a transition from one allocation to another is a function of the number of agents who make mistakes and of the seriousness of each mistake. If preferences are always strict, the unique stochastically stable state is the competitive equilibrium allocation. In economies with indifferences, non-core cycles are sometimes stochastically stable, while some core allocations are not. The robustness of these results is confirmed in a weak coalitional recontracting process. Copyright � The Author(s). Journal compilation � Royal Economic Society 2008.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2008.02187.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 118 (2008)
Issue (Month): 532 (October)
Pages: 1719-1741

as
in new window

Handle: RePEc:ecj:econjl:v:118:y:2008:i:532:p:1719-1741
Contact details of provider: Postal: Office of the Secretary-General, School of Economics and Finance, University of St. Andrews, St. Andrews, Fife, KY16 9AL, UK
Phone: +44 1334 462479
Web page: http://www.res.org.uk/
Email:


More information through EDIRC

Order Information: Web: http://www.blackwellpublishers.co.uk/asp/journal.asp?ref=0013-0133

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Roth, Alvin & Ünver, M. Utku & Sönmez, Tayfun, 2004. "Kidney Exchange," Scholarly Articles 2580565, Harvard University Department of Economics.
  2. Volij, Oscar & Ben-Shoham, Asaf & Serrano, Roberto, 2004. "The Evolution of Exchange," Staff General Research Papers 10247, Iowa State University, Department of Economics.
  3. Robert M. Anderson & William R. Zame, 1997. "Edgeworth's Conjecture with Infinitely Many Commodities: L1," Econometrica, Econometric Society, vol. 65(2), pages 225-274, March.
  4. Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
  5. KANDORI, Michihiro & Roberto Serrano & Oscar Volij, . "Decentralized Trade, Random Utility and the Evolution of Social Welfare," Economic theory and game theory 021, Oscar Volij.
  6. J. Bergin & B. Lipman, 2010. "Evolution with State-Dependent Mutations," Levine's Working Paper Archive 486, David K. Levine.
  7. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  8. Roberto Serrano & Rajiv Vohra & Oscar Volij, 2001. "On the Failure of Core Convergence in Economies with Asymmetric Information," Econometrica, Econometric Society, vol. 69(6), pages 1685-1696, November.
  9. Roth, Alvin E. & Postlewaite, Andrew, 1977. "Weak versus strong domination in a market with indivisible goods," Journal of Mathematical Economics, Elsevier, vol. 4(2), pages 131-137, August.
  10. Green, Jerry R, 1974. "The Stability of Edgeworth's Recontracting Process," Econometrica, Econometric Society, vol. 42(1), pages 21-34, January.
  11. Nir Dagan & Roberto Serrano & Oscar Volij, 1996. "Bargaining, Coalitions, and Competition," Economic theory and game theory 014, Nir Dagan, revised May 1999.
  12. Perry, Motty & Reny, Philip J, 1994. "A Noncooperative View of Coalition Formation and the Core," Econometrica, Econometric Society, vol. 62(4), pages 795-817, July.
  13. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
  14. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, June.
  15. Assaf Ben-Shoham & Roberto Serrano & Oscar Volig, 2000. "The Evolution of Change," Working Papers 2000-06, Brown University, Department of Economics.
  16. Feldman, Allan M, 1974. "Recontracting Stability," Econometrica, Econometric Society, vol. 42(1), pages 35-44, January.
  17. Gomes, Armando R & Jehiel, Philippe, 2001. "Dynamic Processes of Social and Economic Interactions: On the Persistence of Inefficiencies," CEPR Discussion Papers 3012, C.E.P.R. Discussion Papers.
  18. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  19. Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
  20. Hideo Konishi & Debraj Ray, 2000. "Coalition Formation as a Dynamic Process," Boston College Working Papers in Economics 478, Boston College Department of Economics, revised 15 Apr 2002.
  21. Alejandro Manelli, 1989. "Monotonic Preferences and Core Equivalence," Discussion Papers 859, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  22. Anderson, Robert M., 1992. "The core in perfectly competitive economies," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 14, pages 413-457 Elsevier.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:118:y:2008:i:532:p:1719-1741. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.