Strategic Bargaining and Competitive Bidding in a Dynamic Market Equilibrium
This paper extends the bargaining and matching literature such as Rubinstein (1985) and Gale (1986 and 1987) by considering a new matching process. We assume that a central information agency exists, such as job centres and newspapers in the labour market, or real estate agents in the housing market, which puts potential traders into direct contact with each other. With agent heterogeneity, equilibrium trade is characterized by existing traders on the other side (since existing traders have already sampled and rejected each other). Two procedures of trade coexist, namely strategic bilateral bargaining and a competitive bidding process, depending on the number of potential matches a new trader obtains. We characterize the unique symmetric Markov Perfect equilibrium to this stochastic trading game.
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.
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.
|Date of creation:||Apr 1994|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:938. 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: ()
If references are entirely missing, you can add them using this form.