Information aggregation in a large multi-stage market game

Tai-Wei Hu and Neil Wallace

Journal of Economic Theory, 2016, vol. 161, issue C, 103-144

Abstract: A three-stage market-game mechanism is devised that is simple (actions are quantities and outcomes are determined by arithmetic operations that do not depend on details of the economy) and achieves efficiency in a two-divisible-good, pure-exchange setting with potential information-aggregation. After an entry stage, agents make offers which are provisional for all but a small, randomly selected group. Then, those offers are announced, and everyone else makes new offers with payoffs determined by a Shapley–Shubik market game. For a finite and large number of players, there exists an almost ex post efficient equilibrium. Conditions for uniqueness are also provided.

Keywords: Mechanism-design; Information-aggregation; Market-game; Efficiency (search for similar items in EconPapers)
JEL-codes: D43 D82 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:161:y:2016:i:c:p:103-144

DOI: 10.1016/j.jet.2015.11.005

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