Markets for Contracts: Experiments Exploring the Compatibility of Games and Markets for Games
Posted: 8 Oct 2000
The research explores the relationship between games and the economic environment in which the games might be embedded. The focus is on a market institution in which agents buy and sell rights to participate in a follow-on stage of strategic interaction. The central question posed concerns how two different types of processes, the game and the market, interact. The market converges to a competitive equilibrium that is consistent with the Nash equilibrium that obtains in the game, and the convergence of the market to a competitive equilibrium lags the convergence of behaviors in the game to a Nash equilibrium.
Keywords: compatibility of markets and games, simultaneous equilibration, dynamic adjustment processes, institutions
JEL Classification: C72, C90
Suggested Citation: Suggested Citation