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Price-Setting and Attainment of Equilibrium: Posted Offers Versus An Administered Price

Sean M. Collins, Duncan James, Maroš Servátka () and Daniel Woods

MPRA Paper from University Library of Munich, Germany

Abstract: The operation of the posted offer market with advance production environment (Mestelman and Welland, 1988), appropriately parameterized, differs from that of the market entry game (Selten and Gueth, 1982), appropriately presented, only in terms of price-setting. We establish the effect of this difference in price-setting on attainment of the competitive equilibrium allocation while controlling for effects relating to the presentation of the market entry game and to the stationarity or non-stationarity of environment. Free posting of prices promotes convergence to the competitive equilibrium allocation, while the typical market entry game data can be characterized as displaying cycling prices.

Keywords: market entry game; posted offer market; advance production; isomorphism; equilibration (search for similar items in EconPapers)
JEL-codes: C9 C91 D4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-exp
Date: 2017-09-19
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Journal Article: Price-setting and attainment of equilibrium: Posted offers versus an administered price (2017) Downloads
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