The exact law of large numbers for independent random matching

Darrell Duffie and Yeneng Sun ()

Journal of Economic Theory, 2012, vol. 147, issue 3, 1105-1139

Abstract: This paper provides a mathematical foundation for independent random matching of a large population, as widely used in the economics literature. We consider both static and dynamic systems with random mutation, partial matching arising from search, and type changes induced by matching. Under independence assumptions at each randomization step, we show that there is an almost-sure constant cross-sectional distribution of types in a large population, and moreover that the multi-period cross-sectional distribution of types is deterministic and evolves according to the transition matrices of the type process of a given agent. We also show the existence of a joint agent-probability space, and randomized mutation, partial matching and match-induced type-changing functions that satisfy appropriate independence conditions, where the agent space is an extension of the classical Lebesgue unit interval.

Keywords: Independent random matching; Search; Exact law of large numbers; Population dynamics; Random mutation (search for similar items in EconPapers)
JEL-codes: C02 D83 E00 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Related works:
Working Paper: The Exact Law of Large Numbers for Independent Random Matching (2011)
Working Paper: The Exact Law of Large Numbers for Independent Random Matching (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:147:y:2012:i:3:p:1105-1139

DOI: 10.1016/j.jet.2012.01.003

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