CIRJE-F-346 | "Large Market Design in Dominance" |
Author Name | Matsushima, Hitoshi |
Date | June 2005 |
Full Paper | PDF file@ |
Remarks | @ |
Abstract |
This paper introduces a new concept of market mechanism design into general
economic environments with finite but many traders, where multiple objects are traded and
any combination of complements and substitutes is permitted. The auctioneer randomly
divides traders into multiple groups. Within each group, trades occur at the market-clearing
price vector of another group. With private values, any undominated strategy profile
mimics price-taking behavior, enforcing perfect competition. With interdependent values,
any twice iteratively undominated strategy profile mimics the rational expectations
equilibrium, enforcing ex post efficiency. Our mechanisms are detail-free, i.e., they do not
depend on the details of model specification. |