The importance of memory for price discovery in decentralized markets
Abstract
We study the dynamics of price discovery in decentralized two-sided markets. We show that there exist memoryless dynamics that converge to the core of the underlying assignment game in which agents' actions depend only on their current payoff. However, we show that for any such dynamic the convergence time can grow exponentially in relation to the population size. We present a natural dynamic in which a player's reservation value provides a summary of his past information and show that this dynamic converges to the core in polynomial time in homogeneous markets.
Domains
Economics and Finance
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200724_auctionassignment.pdf (683.64 Ko)
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0_GEB publication.pdf (532.96 Ko)
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| Origin | Files produced by the author(s) |
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| Origin | Files produced by the author(s) |
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