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Bargaining dynamics in exchange networks

Author

Listed:
  • Bayati, Mohsen
  • Borgs, Christian
  • Chayes, Jennifer
  • Kanoria, Yash
  • Montanari, Andrea

Abstract

We consider a one-sided assignment market or exchange network with transferable utility and the dynamics of bargaining in such a market. Our dynamical model is local, involving iterative updates of ‘offers’ based on estimated best alternative matches, in the spirit of pairwise Nash bargaining. Agents are not strategic in our model. We establish that when a balanced outcome (a generalization of the pairwise Nash bargaining solution to networks) exists, our dynamics converges rapidly to such an outcome.

Suggested Citation

  • Bayati, Mohsen & Borgs, Christian & Chayes, Jennifer & Kanoria, Yash & Montanari, Andrea, 2015. "Bargaining dynamics in exchange networks," Journal of Economic Theory, Elsevier, vol. 156(C), pages 417-454.
  • Handle: RePEc:eee:jetheo:v:156:y:2015:i:c:p:417-454
    DOI: 10.1016/j.jet.2014.02.007
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    References listed on IDEAS

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    8. Corominas-Bosch, Margarida, 2004. "Bargaining in a network of buyers and sellers," Journal of Economic Theory, Elsevier, vol. 115(1), pages 35-77, March.
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    Cited by:

    1. Blume, Lawrence & Easley, David & Kleinberg, Jon & Kleinberg, Robert & Tardos, Éva, 2015. "Introduction to computer science and economic theory," Journal of Economic Theory, Elsevier, vol. 156(C), pages 1-13.
    2. Alison Watts, 2016. "Auctions Versus Private Negotiations in Buyer-Seller Networks," Games, MDPI, Open Access Journal, vol. 7(3), pages 1-14, August.
    3. repec:gam:jgames:v:7:y:2016:i:2:p:10:d:66888 is not listed on IDEAS
    4. Heinrich H. Nax & Bary S. R. Pradelski, 2016. "Core Stability and Core Selection in a Decentralized Labor Matching Market," Games, MDPI, Open Access Journal, vol. 7(2), pages 1-16, March.

    More about this item

    Keywords

    Nash bargaining; Network; Dynamics; Convergence; Matching; Assignment;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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