Buyer's Equilibrium with Capacity Constraints and Restricted Mobility: A Recursive Approach
Economics Letters 118 (2013) 321–323
4 Pages Posted: 23 Dec 2014
Date Written: December 22, 2014
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: Suggested Citation