Heterogeneity as a coordination device

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Journal of Economic Theory, 111, pp. 265-276, 2003
http://hdl.handle.net/10230/1188
To cite or link this document: http://hdl.handle.net/10230/1188
dc.contributor.author Coles, Melvyn G.
dc.contributor.author Eeckhout, Jan
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 2000-02-01
dc.identifier.citation Journal of Economic Theory, 111, pp. 265-276, 2003
dc.identifier.uri http://hdl.handle.net/10230/1188
dc.description.abstract A model of directed search with a finite number of buyers and sellers is considered, where sellers compete in direct mechanisms. Buyer heterogeneity and Nash equilibrium results in perfect sorting. The restriction to complementary inputs, that the match value function Q is supermodular, in addition coordinates the sellers’ strategies. In that case, equilibrium implements positive assortative matching, which is efficient and consistent with the stable (cooperative equilibrium) outcome. This provides a non-cooperative and decentralized solution for the Assignment Game. Conversely, if buyers are identical, no such coordination is possible, and there is a continuum of equilibria, one of which exhibits price posting, another yields competition in auctions.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 510
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title Heterogeneity as a coordination device
dc.title.alternative Indeterminacy and Directed Search
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:14:02Z
dc.subject.keyword Microeconomics
dc.subject.keyword matching
dc.subject.keyword assignment game
dc.subject.keyword directed search
dc.subject.keyword supermodularity
dc.subject.keyword truthful equilibrium
dc.rights.accessRights info:eu-repo/semantics/openAccess


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