Matching and bargaining models of markets: Approximating small markets by large markets

Research output: Contribution to journalArticle

Abstract

We show that the equilibrium of a matching and bargaining model of a market in which there is a finite number of agents at each date need not be near the equilibrium of a market with a continuum of agents, although matching probabilities are the same in both markets. Holding the matching process fixed, as the finite market becomes large its equilibrium approaches the equilibrium of its continuum limit.

Original languageEnglish (US)
Pages (from-to)215-224
Number of pages10
JournalEconomic Theory
Volume11
Issue number1
DOIs
StatePublished - 1998

ASJC Scopus subject areas

  • Economics and Econometrics

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