Buyer's Equilibrium with Capacity Constraints and Restricted Mobility: A Recursive Approach

Economics Letters 118 (2013) 321–323

4 Pages Posted: 23 Dec 2014

See all articles by Gabriele Camera

Gabriele Camera

Chapman University - Economic Science Institute; University of Bologna - Dept. of Economics

Jaehong Kim

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE)

Date Written: December 22, 2014

Abstract

We study a decentralized trading model as in Peters (1984a), where heterogeneous market participants face a trade-off between price and trade probability. We present a novel proof of existence of a unique demand vector in Nash equilibrium, based on a recursive approach that exploits the monotonicity of matching functions.

Keywords: Nash equilibrium, Recursive methods, Existence, Heterogeneity, Matching

JEL Classification: C70, D390, D490, E390

Suggested Citation

Camera, Gabriele and Kim, Jaehong, Buyer's Equilibrium with Capacity Constraints and Restricted Mobility: A Recursive Approach (December 22, 2014). Economics Letters 118 (2013) 321–323. Available at SSRN: https://ssrn.com/abstract=2541952

Gabriele Camera (Contact Author)

Chapman University - Economic Science Institute ( email )

Orange, CA 92866
United States

HOME PAGE: http://www1.chapman.edu/~camera/

University of Bologna - Dept. of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Jaehong Kim

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE) ( email )

A 307, Economics Building
Xiamen, Fujian 10246
China

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