Equivalence of canonical matching models
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Equivalence of canonical matching models. / Kennes, John; le Maire, Daniel; Roelsgaard, Sebastian T.
I: Games and Economic Behavior, Bind 124, 11.2020, s. 169-182.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Equivalence of canonical matching models
AU - Kennes, John
AU - le Maire, Daniel
AU - Roelsgaard, Sebastian T.
PY - 2020/11
Y1 - 2020/11
N2 - This paper offers expected revenue and pricing equivalence results for canonical matching models. The equivalence of these models is centered on the assumption that there are large numbers of buyers and sellers, and the contact decisions of buyers to sellers are made independently. Therefore, the distribution of buyers to sellers is approximated by the Poisson distribution. The list of canonical matching models includes the models developed by Burdett and Judd (1983), Shimer (2005), and McAfee (1993). In the Burdett and Judd model, buyers post prices and the equilibrium features price dispersion because identical buyers play mixed strategies. In the Shimer model, sellers post a vector of prices corresponding to different buyer types. In equilibrium, all identical buyers pay the same price. In the McAfee model, equilibrium pricing is determined by simple second price auctions. McAfee's model also features price dispersion because the number of bidders at each auction is stochastic.
AB - This paper offers expected revenue and pricing equivalence results for canonical matching models. The equivalence of these models is centered on the assumption that there are large numbers of buyers and sellers, and the contact decisions of buyers to sellers are made independently. Therefore, the distribution of buyers to sellers is approximated by the Poisson distribution. The list of canonical matching models includes the models developed by Burdett and Judd (1983), Shimer (2005), and McAfee (1993). In the Burdett and Judd model, buyers post prices and the equilibrium features price dispersion because identical buyers play mixed strategies. In the Shimer model, sellers post a vector of prices corresponding to different buyer types. In equilibrium, all identical buyers pay the same price. In the McAfee model, equilibrium pricing is determined by simple second price auctions. McAfee's model also features price dispersion because the number of bidders at each auction is stochastic.
KW - Competing auctions
KW - Directed search
KW - Poisson distribution
KW - Price dispersion
U2 - 10.1016/j.geb.2020.08.002
DO - 10.1016/j.geb.2020.08.002
M3 - Journal article
AN - SCOPUS:85089850158
VL - 124
SP - 169
EP - 182
JO - Games and Economic Behavior
JF - Games and Economic Behavior
SN - 0899-8256
ER -
ID: 251424737