Large Market Design in Dominance

Hitoshi Matsushima

No CIRJE-F-346, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: This paper introduces a new concept of market mechanism design into general economic environments with finite but many traders, where multiple objects are traded and any combination of complements and substitutes is permitted. The auctioneer randomly divides traders into multiple groups. Within each group, trades occur at the market-clearing price vector of another group. With private values, any undominated strategy profile mimics price-taking behavior, enforcing perfect competition. With interdependent values, any twice iteratively undominated strategy profile mimics the rational expectations equilibrium, enforcing ex post efficiency. Our mechanisms are detail-free, i.e., they do not depend on the details of model specification.

Pages: 26 pages
Date: 2005-06
New Economics Papers: this item is included in nep-sea
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Working Paper: Large Market Design in Dominance (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2005cf346

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