A three-stage market-game mechanism is devised that is simple (actions are quantities and outcomes are determined by arithmetic operations that do not depend on details of the economy) and achieves efficiency in a two-divisible-good, pure-exchange setting with potential information-aggregation. After an entry stage, agents make offers which are provisional for all but a small, randomly selected group. Then, those offers are announced, and everyone else makes new offers with payoffs determined by a Shapley-Shubik market game. For a finite and large number of players, there exists an almost ex post efficient equilibrium. Conditions for uniqueness are also provided.
|Number of pages||42|
|Journal||Journal of Economic Theory|
|Early online date||2 Dec 2015|
|Publication status||Published - Jan 2016|
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Professor Tai-Wei Hu
- School of Economics - Professor of Economics