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dc.contributor.authorGale, Douglasen_GB
dc.contributor.authorSabourian, Hamiden_GB
dc.date.accessioned2004-06-16T16:05:36Z
dc.date.available2004-06-16T16:05:36Z
dc.date.created2003-10en_GB
dc.date.issued2004-06-16T16:05:36Z
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/377
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/377
dc.description.abstractThis paper uses the complexity of non-competitive behaviour to provide a new justification for competitive equilibrium in the context of extensive-form market games with a finite number of agents. This paper demonstrates that if rational agents have (at least at the margin) an aversion for complex behaviours then their maximizing behaviour will result in simple behavioural rules and thereby in a perfectly competitive outcome. In particular, we consider sequential market games with heterogeneous sets of buyers and sellers and show that if the complexity costs of implementing strategies enter players� preferences, together with the standard payoff in the game, then every equilibrium strategy profile induces a competitive outcome. This is done for sequential deterministic matching/bargaining models in which at any date either the identities of the matched players are determined exogenously or one player is exogenously selected to choose his partner and make a price proposal.en_GB
dc.format.extent427099 bytes
dc.format.mimetypeapplication/pdfen_GB
dc.format.mimetypeapplication/pdf
dc.language.isoen_GB
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectmatching
dc.subjectcomplexity
dc.subjectautomation
dc.subjectbounded rationality
dc.subjectMarkov equilibrium
dc.subjectcompetitive equilibrium
dc.subject.classificationClassification-JEL: C72, D78, D5en_GB
dc.subject.otherbargainingen_GB
dc.titleComplexity and Competition, Part I: Sequential Matchingen_GB
dc.typeWorking Paperen
dc.identifier.doi10.17863/CAM.5203


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