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Limits of Exact Equilibria for Capacity Constrained Sellers with costlySearch

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  • Michael Peters

Abstract

The paper contrasts the exact equilibria of games where sellers compete in price with the rational expectations equilibria of these games. It is shown that the distribution of prices offered by sellers in both the exact and rational expectations equilibrium converge weakly to the same limit as the number of buyers and sellers grows large. Furthermore, the payoffs that sellers face in both kinds of equilibrium have the market utility property in the limit.

Suggested Citation

  • Michael Peters, 1998. "Limits of Exact Equilibria for Capacity Constrained Sellers with costlySearch," Working Papers peters-98-01, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:peters-98-01
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing

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