THE EVOLUTIONARY STABILITY OF AUCTIONS OVER BARGAINING

Authors
LU XH MCAFEE RP
Citation
Xh. Lu et Rp. Mcafee, THE EVOLUTIONARY STABILITY OF AUCTIONS OVER BARGAINING, Games and economic behavior, 15(2), 1996, pp. 228-254
Citations number
15
Categorie Soggetti
Economics
Journal title
Games and economic behavior → ACNP
ISSN journal
08998256
Volume
15
Issue
2
Year of publication
1996
Pages
228 - 254
Database
ISI
SICI code
0899-8256(1996)15:2<228:TESOAO>2.0.ZU;2-V
Abstract
This paper considers equilibrium in transaction mechanisms. In an envi ronment with homogeneous buyers and sellers, which eliminates the adva ntage auctions possess of matching buyers and sellers, both auctions a nd bargaining are equilibria. However, only auctions are evolutionaril y stable. This identifies a new advantage of auctions over bargaining, arising from the division of the gains from trade. (C) 1996 Academic Press, Inc.