Markets for Contracts: Experiments Exploring the Compatibility of Games and Markets for Games

Posted: 8 Oct 2000

See all articles by Charles R. Plott

Charles R. Plott

California Institute of Technology - Division of the Humanities and Social Sciences

Dean V. Williamson

Independent

Abstract

The research explores the relationship between games and the economic environment in which the games might be embedded. The focus is on a market institution in which agents buy and sell rights to participate in a follow-on stage of strategic interaction. The central question posed concerns how two different types of processes, the game and the market, interact. The market converges to a competitive equilibrium that is consistent with the Nash equilibrium that obtains in the game, and the convergence of the market to a competitive equilibrium lags the convergence of behaviors in the game to a Nash equilibrium.

Keywords: compatibility of markets and games, simultaneous equilibration, dynamic adjustment processes, institutions

JEL Classification: C72, C90

Suggested Citation

Plott, Charles R. and Williamson, Dean V., Markets for Contracts: Experiments Exploring the Compatibility of Games and Markets for Games. Economic Theory, Vol. 16, Issue 3. Available at SSRN: https://ssrn.com/abstract=239395

Charles R. Plott (Contact Author)

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
337 Baxter Hall
Pasadena, CA 91125
United States
626-395-4209 (Phone)

Dean V. Williamson

Independent ( email )

Washington, DC
United States

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