Bargaining, Coalitions and Competition

We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walra...

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Bibliographic Details
Published in:Economic theory 2000-03, Vol.15 (2), p.279-296
Main Authors: Dagan, Nir, Serrano, Roberto, Volij, Oscar
Format: Article
Language:English
Subjects:
Auctions
Bargaining
Coalitions
Commodities
Competition
Economic agents
Economic modeling
Economic models
Economic theory
Economics
Equilibrium
Equivalence
Exchange theory
Lotteries
Market equilibrium
Meetings
Prices
Risk aversion
Trade
Utility functions
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Summary:We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods.
ISSN:0938-2259
1432-0479
DOI:10.1007/s001990050013