Non-price equilibria in markets of discrete goods

A. Hassidim, H Kaplan, Y Mansour, N Nisan

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

We study markets of indivisible items in which price-based (Walrasian) equilibria often do not exist due to the discrete non-convex setting. Instead we consider Nash equilibria of the market viewed as a game, where players bid for items, and where the highest bidder on an item wins it and pays his bid. We first observe that pure Nash-equilibria of this game excatly correspond to price-based equilibiria (and thus need not exist), but that mixed-Nash equilibria always do exist, and we analyze their structure in several simple cases where no price-based equilibrium exists. We also undertake an analysis of the welfare properties of these equilibria showing that while pure equilibria are always perfectly efficient ("first welfare theorem"), mixed equilibria need not be, and we provide upper and lower bounds on their amount of inefficiency.
Original languageEnglish
Title of host publicationEC '11: ACM Conference on Electronic Commerce
PublisherACM
Pages295-296
Number of pages2
ISBN (Print)978-1-4503-0261-6
DOIs
StatePublished - 5 Jun 2011
Externally publishedYes

Bibliographical note

Place of conference:USA

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