Efficient Price Discovery and Information in the Decentralized Assignment Game
29 Pages Posted: 24 Oct 2017
Date Written: October 23, 2017
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
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