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The outcome of competitive equilibrium rules in buyer–seller markets when the agents play strategically

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  • David Pérez-Castrillo

    (Universitat Autònoma de Barcelona and Barcelona GSE)

  • Marilda Sotomayor

    (University of São Paulo)

Abstract

We analyze the two-stage games induced by competitive equilibrium rules for the buyer–seller market of Shapley and Shubik (Int J Game Theory 1:111–130, 1972). In these procedures, first sellers and then buyers report their valuation and the outcome is determined by a competitive equilibrium outcome for the market reported by the agents. We provide results concerning buyers and sellers’ equilibrium strategies. In particular, our results point out that, by playing first, sellers are able to instigate an outcome that corresponds to the sellers’ optimal competitive equilibrium allocation for the true market.

Suggested Citation

  • David Pérez-Castrillo & Marilda Sotomayor, 2017. "The outcome of competitive equilibrium rules in buyer–seller markets when the agents play strategically," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(1), pages 99-119, June.
    • Handle: RePEc:spr:joecth:v:64:y:2017:i:1:d:10.1007_s00199-016-0997-9
    DOI: 10.1007/s00199-016-0997-9
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    More about this item

    Keywords

    Assignment game; Competitive price; Optimal matching; Competitive rule;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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