Matching buyers and sellers

Massimo De Francesco ()

Economics Bulletin, 2005, vol. 3, issue 31, 1-10

Abstract: This note analyzes the repeated interaction among buyers of a homogeneous good, in a setting of imperfect buyer mobility. The buyers are assumed to play a dynamic game of imperfect information: at each stage every buyer chooses which seller to visit without knowing the current and past choices of the other buyers. A norm of conditional loyalty might prevail, according to which buyers keep loyal if previously served. Under generalized conditional loyalty, an efficient allocation is certainly reached in a finite number of stages. There is a clear case for boundedly rational buyers to keep conditionally loyal. And, most importantly, for the two-seller case we are able to establish adherence to a strategy of conditional loyalty as an “assessment equilibrium” of the dynamic buyer game.

Keywords: assessment; equilibrium (search for similar items in EconPapers)
JEL-codes: C7 L0 (search for similar items in EconPapers)
Date: 2005-06-14
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Citations: View citations in EconPapers (2)

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