This paper shows that all perfect Bayesian equilibria of a dynamic matching game with two-sided incomplete information of independent private values variety converge to competitive equilibria. Buyers purchase a bundle of heterogeneous, indivisible goods and sellers own one unit of an indivisible...

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...

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....

Despite the mixed empirical evidence, many economists stillhold to the view that Internet will promote competition betweenfirms,thereby lowering prices and increasing economic welfare. This paperpresents a search model that provides a different view. We analyzethemarket for a homogeneous good...

The standard Walrasian equilibrium theory requires that the marginal value product of production factor such as labor is equal across firms and industries. However, productivity dispersion is widely observed in the real economy. Search theory allegedly fills this gap by encompassing apparent...

In this paper I argue that search theory is a useful addition to the way economists and geographers have approached the study of commuting behavior. This is illustrated by showing that introduction of a spatial element into the standard model of job search leads to the prediction of critical...

We generalize some recent results developed in static policy games with multiple players, to a dynamic context. We find that the classical theory of economic policy can be usefully applied to a strategic context of difference games: if one player satisfies the Golden Rule, then either all other...

This paper considers a communication network characterized by an endogenous architecture and an imperfect transmission of information as in Bala and Goyal (2000). We propose a similar network's model with the difference that it is characterized by an endogenous rate of information decay....

A recent strand of literature (see Morris and Shin 2001) shows that multiple equilibria in models of markets for pegged currencies vanish if there is slightly diverse information between traders. It is known that this approach works only if there is not too precise common knowledge in the...

Recent literature shows that learning in oligopoly games might in the long run result in the Cournot or in the Walras equilibrium. Which outcome is achieved seems to depend on the underlying learning dynamics. This paper analyzes the forces behind the learning mechanisms determining the long run...