Competitive Equilibria in Decentralized Matching with Incomplete Information

This paper shows that all perfect Bayesian equilibria of a decentralized dynamic matching market with two-sided incomplete information of independent private values variety converge to competitive equilibria. Each buyer wants to purchase a bundle of heterogeneous, indivisible goods and each seller owns one unit of a heterogeneous indivisible good (as in Kelso and Crawford (1982) or Gul and Stacchetti (1999)). Buyer preferences and endowments as well as seller costs are private information. Agents engage in costly search and meet randomly. The terms of trade are determined through bilateral bargaining between buyers and sellers. The paper considers a market in steady state. It is shown that as frictions, i.e., discounting and fixed costs of search become small, all equilibria of the market game converge to perfectly competitive equilibria.Bargaining, Search, Matching

Competitive Equilibria in Decentralized Matching with Incomplete Information

This paper shows that all perfect Bayesian equilibria of a dynamic matching game with two-sided incomplete information of independent private values variety are asymptotically Walrasian. Buyers purchase a bundle of heterogeneous, indivisible goods and sellers own one unit of an indivisible good. Buyer preferences and endowments as well as seller costs are private information. Agents engage in costly search and meet randomly. The terms of trade are determined through a Bayesian mechanism proposal game. The paper considers a market in steady state. As discounting and the fixed cost of search become small, all trade takes place at a Walrasian price. However, a robust example is presented where the limit price vector is a Walrasian price for an economy where only a strict subsets of the goods in the original economy are traded, i.e, markets are missing at the limit. Nevertheless, there exists a sequence of equilibria that converge to a Walrasian equilibria for the whole economy where all markets are open.Conditional CAPM

Efficient dynamic matching with costly search

This paper considers a frictional market where buyers and sellers, with unit demand and supply, search for trading opportunities. The analysis focuses on explicit search frictions, allows for two-sided incomplete information, and puts no restriction on agent heterogeneity. In this context, a non-trivial, full trade search equilibrium is shown to exist, equilibria are characterized as the values that satisfy the first order conditions for a non-linear planner's (optimization) problem, and necessary and sufficient conditions are provided for the existence of efficient search equilibria under complete information. These results fully generalize to the twosided incomplete information setting, under an additive separability condition

Competitive equilibria in decentralized matching with incomplete information

This paper shows that all perfect Bayesian equilibria of a dynamic matching game with two-sided incomplete information of independent private values variety are asymptotically Walrasian. Buyers purchase a bundle of heterogeneous, indivisible goods and sellers own one unit of an indivisible good. Buyer preferences and endowments as well as seller costs are private information. Agents engage in costly search and meet randomly. The terms of trade are determined through a Bayesian mechanism proposal game. The paper considers a market in steady state. As discounting and the fixed cost of search become small, all trade takes place at a Walrasian price. However, a robust example is presented where the limit price vector is a Walrasian price for an economy where only a strict subsets of the goods in the original economy are traded, i.e, markets are missing at the limit. Nevertheless, there exists a sequence of equilibria that converge to a Walrasian equilibria for the whole economy where all markets are open

Phonons in Nanocrystalline 57Fe

We measured the phonon density of states (DOS) of nanocrystalline Fe by resonant inelastic nuclear γ-ray scattering. The nanophase material shows large distortions in its phonon DOS. We attribute the high energy distortion to lifetime broadening. A damped harmonic oscillator model for the phonons provides a low quality factor, Qu, averaging about 5, but the longitudinal modes may have been broadened most. The nanocrystalline Fe also shows an enhancement in its phonon DOS at energies below 15 meV. The difference in vibrational entropy of the bulk and nanocrystalline Fe was small, owing to competing changes in the nanocrystalline phonon DOS at low and high energies

Local Chemical Environments and the Phonon Partial Densities of States of 57Fe in 57Fe3Al

Inelastic nuclear resonant scattering spectra were measured on alloys of Fe3Al that were chemically disordered, partially ordered, and D03 ordered. The features in the phonon partial density of states of 57Fe were found to change systematically with chemical short-range order in the alloy. Changes in the phonon partial density of states were modeled successfully by assigning vibrational spectra to 57Fe atoms in different first-nearest-neighbor chemical environments

Designing a road network for hazardous materials shipments

Cataloged from PDF version of article.We consider the problem of designating hazardous materials routes in and through a major population center. Initially, we restrict our attention to a minimally connected network (a tree) where we can predict accurately the flows on the network. We formulate the tree design problem as an integer programming problem with an objective of minimizing the total transport risk. Such design problems of moderate size can be solved using commercial solvers. We then develop a simple construction heuristic to expand the solution of the tree design problem by adding road segments. Such additions provide carriers with routing choices, which usually increase risks but reduce costs. The heuristic adds paths incrementally, which allows local authorities to trade off risk and cost. We use the road network of the city of Ravenna, Italy, to demonstrate the solution of our integer programming model and our path-addition heuristic. © 2005 Elsevier Ltd. All rights reserved

Reputation with long run players and imperfect observation

Previous work shows that reputation results may fail in repeated games between two long-run players with equal discount factors. We restrict attention to an infinitely repeated game where two players with equal discount factors play a simultaneous move stage game where actions of player 2 are imperfectly observed. The set of commitment types for player 1 is taken as any (countable) set of finite automata. In this context, for a restricted class of stage games, we provide a one sided reputation result. If player 1 is a particular commitment type with positive probability and player 2's actions are imperfectly observed, then player 1 receives his highest pay-off, compatible with individual rationality, in any Bayes-Nash equilibria, as agents become patient

A two-sided reputation result with long run

Cripps et al. (2005) conjectured that in an infinitely repeated game with two equally patient players, if there is positive probability that the players could be Stackelberg types, then equilibrium behavior would resemble a war of attrition, i.e., a two-sided reputation result would hold. In this note we show that this conjecture is indeed true for a wide set of stage games for which the one-sided reputation result of Atakan and Ekmekci (2008) holds

Bargaining and reputation in search markets

In a two-sided search market agents are paired to bargain over a unit surplus. The matching market serves as an endogenous outside option for a bargaining agent. Behavioral agents are commitment types that demand a constant portion of the surplus. The frequency of behavioral types is determined in equilibrium. Even if the frequency of behavioral types is negligible, they affect the terms of trade and efficiency. In an unbalanced market where the entering flow of one side is short, there is one-sided reputation building in bargaining, and commitment types on the short side determine the terms of trade. In a balanced market where the entering flows are equal, there is twosided reputation building in bargaining, and reputation concerns lead to inefficiency. An equilibrium with persistent delays is constructed. The magnitude of inefficiency is determined by the demands of the commitment types and is independent of their frequency. Access to the market exacerbates bargaining inefficiencies caused by behavioral types, even at the frictionless limit of complete rationality