Market sentiments and convergence dynamics in decentralized assignment economies

Bary S. R. Pradelski () and Heinrich H. Nax ()
Additional contact information
Bary S. R. Pradelski: University Grenoble Alpes, CNRS, Inria, Grenoble INP, LIG
Heinrich H. Nax: ETH Zurich

International Journal of Game Theory, 2020, vol. 49, issue 1, No 12, 275-298

Abstract: Abstract In two-sided markets with transferable utility (‘assignment games’), we study the dynamics of trade arrangements and price adjustments as agents from the two market sides stochastically match, break up, and re-match in their pursuit of better opportunities. The underlying model of individual adjustments is based on the behavioral theories of adaptive learning and aspiration adjustment. Dynamics induced by this model converge to approximately optimal and stable market outcomes, but this convergence may be (exponentially) slow. We introduce the notion of a ‘market sentiment’ that governs which of the two market sides is temporarily more or less amenable to price adjustments, and show that such a feature may significantly speed up convergence.

Keywords: Assignment games; Core; Evolutionary game theory; Matching markets; Convergence time; Market psychology (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s00182-019-00694-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jogath:v:49:y:2020:i:1:d:10.1007_s00182-019-00694-0

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/182/PS2

DOI: 10.1007/s00182-019-00694-0

Access Statistics for this article

International Journal of Game Theory is currently edited by Shmuel Zamir, Vijay Krishna and Bernhard von Stengel

More articles in International Journal of Game Theory from Springer, Game Theory Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().