Problem: Random Matching Assume that the seller is matched with n e {1,2} buyers, who have common valuation of the player has a discount factor of 6. Each period the seller is randomly matched with one of the of them is randomly chosen to make an offer. If the offer is not accepted game continues, if game stops. Find the prices proposed by the seller and the buyer in equilibrium. Show that • for n = 1 if ô is close to 1, both prices are close to v; !!

Problem: Random Matching Assume that the seller is matched with n e {1,2} buyers, who have common valuation of the player has a discount factor of 6. Each period the seller is randomly matched with one of the of them is randomly chosen to make an offer. If the offer is not accepted game continues, if game stops. Find the prices proposed by the seller and the buyer in equilibrium. Show that • for n = 1 if ô is close to 1, both prices are close to v; !!

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.7P

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