Efficient Price Discovery and Information in the Decentralized Assignment Game

29 Pages Posted: 24 Oct 2017

See all articles by Jacob Leshno

Jacob Leshno

Chicago Booth

Bary Pradelski

CNRS, Université Grenoble Alpes

Date Written: October 23, 2017

Abstract

We study the dynamics of price discovery in decentralized assignment games. There exist naive mechanisms that converge to the core in which agents' actions depend only on their current payoff. However, we show that for any such mechanism the convergence time can grow exponentially in the population size. We present a natural mechanism in which a player's reservation value provides a summary of her past information, and show that this mechanism converges to the core in polynomial time. In addition, the strategies implied by the mechanism are incentive compatible in a broad class of markets.

Keywords: Assignment Game, Price Discovery, Information, Convergence Time

Suggested Citation

Leshno, Jacob and Pradelski, Bary, Efficient Price Discovery and Information in the Decentralized Assignment Game (October 23, 2017). Available at SSRN: https://ssrn.com/abstract=3057554 or http://dx.doi.org/10.2139/ssrn.3057554

Jacob Leshno

Chicago Booth ( email )

5807 S. Woodlawn Ave
Chicago, IL 60610
United States

Bary Pradelski (Contact Author)

CNRS, Université Grenoble Alpes ( email )

Grenoble
France

HOME PAGE: http://cnrs.fr

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