An optimistic search equilibrium

Dipjyoti Majumdar, Artyom Shneyerov () and Huan Xie
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Dipjyoti Majumdar: Concordia University
Artyom Shneyerov: Concordia University

Review of Economic Design, 2016, vol. 20, issue 2, No 1, 89-114

Abstract: Abstract We study a market search equilibrium with aggregate uncertainty, private information and heterogeneous beliefs that are initially optimistic. Despite these biased beliefs, it is shown that all optimistic equilibria converge to perfect competition in the limit as the time between matches tends to 0.

Keywords: Markets with search frictions; Heterogeneous beliefs; Optimism; Bargaining; Aggregate uncertainty (search for similar items in EconPapers)
JEL-codes: C73 C78 D83 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10058-015-0182-9

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