Evolutionary dynamics and equitable core selection in assignment games

Heinrich H. Nax and Bary S. R. Pradelski

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study evolutionary dynamics in assignment games where many agents interact anonymously at virtually no cost. The process is decentralized, very little information is available and trade takes place at many different prices simultaneously. We propose a completely uncoupled learning process that selects a subset of the core of the game with a natural equity interpretation. This happens even though agents have no knowledge of other agents’ strategies, payoffs, or the structure of the game, and there is no central authority with such knowledge either. In our model, agents randomly encounter other agents, make bids and offers for potential partnerships and match if the partnerships are profitable. Equity is favored by our dynamics because it is more stable, not because of any ex ante fairness criterion.

Keywords: assignment games; cooperative games; core; equity; evolutionary game theory; learning; matching markets; stochastic stability (search for similar items in EconPapers)
JEL-codes: C71 C73 C78 D8 D83 (search for similar items in EconPapers)
Date: 2015-11
New Economics Papers: this item is included in nep-evo, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Published in International Journal of Game Theory, November, 2015, 44(4), pp. 903-932. ISSN: 0020-7276

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:65428

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