IDEAS home Printed from https://ideas.repec.org/p/cte/werepe/2982.html

Bargaining and matching in small markets

Author

Listed:
  • Wooders, John

Abstract

The present paper focuses on markets where trade is carried out through matching and bargaining and where at each date t = 0,1, ... a finite and exogenously given number of agents enters. Such markets are "small" in the sense that whether a match ends with trade influences matching probabilities at subsequent dates. For a small market we show that as the market becomes large, the equilibrium of the small market converges to the equilibrium of a limit market with a continuum of agents. Nonetheless, for any small market there exists a matching process such that the equilibrium of the small market significantly differs from the equilibrium of the associated large market with a continuum of agents, although equilibrium-path matching probabilities are the same in both markets. Therefore, matching models with a continuum of agents are not always a good approximation of small markets.

Suggested Citation

  • Wooders, John, 1994. "Bargaining and matching in small markets," UC3M Working papers. Economics 2982, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:2982
    as

    Download full text from publisher

    File URL: https://e-archivo.uc3m.es/rest/api/core/bitstreams/1a80938b-d968-4474-9b50-1ca63b8f94d7/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anderson, Robert M, 1978. "An Elementary Core Equivalence Theorem," Econometrica, Econometric Society, vol. 46(6), pages 1483-1487, November.
    2. Wolinsky, Asher, 1987. "Matching, search, and bargaining," Journal of Economic Theory, Elsevier, vol. 42(2), pages 311-333, August.
    3. Gale, Douglas, 1987. "Limit theorems for markets with sequential bargaining," Journal of Economic Theory, Elsevier, vol. 43(1), pages 20-54, October.
    4. Rubinstein, Ariel & Wolinsky, Asher, 1985. "Equilibrium in a Market with Sequential Bargaining," Econometrica, Econometric Society, vol. 53(5), pages 1133-1150, September.
    5. Feldman, Mark & Gilles, Christian, 1985. "An expository note on individual risk without aggregate uncertainty," Journal of Economic Theory, Elsevier, vol. 35(1), pages 26-32, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dranev Yury & Maxim Babushkin, 2014. "Asymmetric exchange-rate exposure in BRIC countries," HSE Working papers WP BRP 27/FE/2014, National Research University Higher School of Economics.
    2. Twisha Chatterjee, 2018. "A model of search and matching with PES intermediation," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 1-36, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Calvo-Armengol, Antoni, 2003. "A decentralized market with trading links," Mathematical Social Sciences, Elsevier, vol. 45(1), pages 83-103, February.
    2. Cho, In-Koo & Matsui, Akihiko, 2017. "Foundation of competitive equilibrium with non-transferable utility," Journal of Economic Theory, Elsevier, vol. 170(C), pages 227-265.
    3. Choi, Michael & Rocheteau, Guillaume, 2024. "Foundations of market power in monetary economies," Journal of Economic Theory, Elsevier, vol. 222(C).
    4. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," 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 7, pages 179-225, Elsevier.
    5. Raphaela Hyee, 2011. "Education in a Marriage Market Model without Commitment," Working Papers 683, Queen Mary University of London, School of Economics and Finance.
    6. Polanski Arnold & Vega-Redondo Fernando, 2018. "Bargaining Frictions in Trading Networks," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(1), pages 1-11, January.
    7. Bester, Helmut, 2013. "Investments and the holdup problem in a matching market," Journal of Mathematical Economics, Elsevier, vol. 49(4), pages 302-311.
    8. Moreno, Diego & Wooders, John, 2016. "Dynamic markets for lemons: performance, liquidity, and policy intervention," Theoretical Economics, Econometric Society, vol. 11(2), May.
    9. Masters, Adrian, 2008. "Unpleasant middlemen," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 73-86, October.
    10. Dipjyoti Majumdar & Artyom Shneyerov & Huan Xie, 2016. "An optimistic search equilibrium," Review of Economic Design, Springer;Society for Economic Design, vol. 20(2), pages 89-114, June.
    11. Rafael R. Guthmann, 2024. "Price dispersion in dynamic competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(4), pages 1203-1232, December.
    12. Pissarides, Christopher & Mortensen, Dale T., 2001. "Taxes, Subsidies and Equilibrium Labour Market Outcomes," CEPR Discussion Papers 2989, Centre for Economic Policy Research.
    13. Yuet-Yee Wong & Randall Wright, 2011. "Buyers, sellers and middlemen: variations in search theory," Working Papers 691, Federal Reserve Bank of Minneapolis.
    14. Stephan Lauermann, 2013. "Dynamic Matching and Bargaining Games: A General Approach," American Economic Review, American Economic Association, vol. 103(2), pages 663-689, April.
    15. Jaerim Choi, 2021. "Two-sided heterogeneity, endogenous sharing, and international matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(2), pages 473-509, September.
    16. Shneyerov, Artyom & Wong, Adam Chi Leung, 2010. "The rate of convergence to perfect competition of matching and bargaining mechanisms," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1164-1187, May.
    17. James S. Costain, 1998. "On the quantitative importance of wage bargaining models," Economics Working Papers 262, Department of Economics and Business, Universitat Pompeu Fabra.
    18. Ponsati Clara, 2004. "Search and Bargaining in Large Markets With Homogeneous Traders," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-27, February.
    19. Shneyerov, Artyom & Wong, Adam Chi Leung, 2010. "Bilateral matching and bargaining with private information," Games and Economic Behavior, Elsevier, vol. 68(2), pages 748-762, March.
    20. Daughety, Andrew F. & Reinganum, Jennifer F., 1994. "Settlement negotiations with two-sided asymmetric information: Model duality, information distribution, and efficiency," International Review of Law and Economics, Elsevier, vol. 14(3), pages 283-298, September.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cte:werepe:2982. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Poveda (email available below). General contact details of provider: http://www.eco.uc3m.es/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.