Full substitutability

John William Hatfield (), Scott Kominers, Alexandru Nichifor (), Michael Ostrovsky and Alexander Westkamp ()
Additional contact information
John William Hatfield: McCombs School of Business, University of Texas at Austin
Alexandru Nichifor: Economics Department, University of Melbourne
Alexander Westkamp: Department of Management, Economics and Social Sciences, University of Cologne

Theoretical Economics, 2019, vol. 14, issue 4

Abstract: Various forms of substitutability are essential for establishing the existence of equilibria and other useful properties in diverse settings such as matching, auctions, and exchange economies with indivisible goods. We extend earlier models' definitions of substitutability to settings in which each agent can be both a buyer in some transactions and a seller in others, and show that all these definitions are equivalent. We then introduce a new class of substitutable preferences that allows us to model intermediaries with production capacity. We also prove that substitutability is preserved under economically important transformations such as trade endowments, mergers, and limited liability.

Keywords: Matching with contracts; substitutability; trading networks (search for similar items in EconPapers)
JEL-codes: C62 C78 D44 D47 (search for similar items in EconPapers)
Date: 2019-12-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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