 Bargaining in dynamic marketsMihai Manea Games and Economic Behavior, 2017, vol. 104, issue C, 59-77 Abstract: We study non-stationary markets in which traders are randomly matched to bargain over the price of a heterogeneous good or the terms of a partnership. The economy consists of a continuum of players drawn from a finite set of types. Players exogenously enter the market over time and exit upon trading. At every date, matching probabilities for each pair of types are determined by the endogenous distribution of trader types in the market. The balance of bargaining power at any stage depends on variations in potential gains from trade, the inflows of new traders, the structure of agreements at future dates, and the induced frequency of trading opportunities. We establish that an equilibrium always exists. Moreover, all equilibria that lead to the same evolution of the economy are payoff equivalent. However, we show that multiple self-fulfilling expectations about the trajectory of the economy, generating distinct equilibrium dynamics and payoffs, may coexist. Keywords: Bargaining; Decentralized non-stationary markets; Random matching; Equilibrium existence; Multiplicity; Iterated conditional dominance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:104:y:2017:i:c:p:59-77 DOI: 10.1016/j.geb.2017.02.014 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.