Uniqueness of equilibrium in directed search models

Jaehong Kim and Gabriele Camera

Journal of Economic Theory, 2014, vol. 151, issue C, 248-267

Abstract: We study a decentralized trading model as in [7], where a finite number of heterogeneous capacity-constrained sellers compete for a finite number of homogeneous buyers, by posting prices. This “directed search” model is known to admit symmetric equilibria; yet, uniqueness has proved elusive. This study makes two contributions: a substantive contribution is to establish uniqueness of symmetric equilibrium; a methodological contribution is to develop a tool based on directional derivatives to characterize equilibrium.

Keywords: Nash equilibrium; Matching; Price distribution; Search (search for similar items in EconPapers)
JEL-codes: C70 D39 D49 E39 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:151:y:2014:i:c:p:248-267

DOI: 10.1016/j.jet.2013.11.004

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