Nash Equilibrium to Competitive Equilibrium Mechanisms Design: Subsidization and Punishment

Endogenous Mechanisms and Nash Equilibrium in Competitive Contracting

We model strategic competition in a market with asymmetric information as a noncooperative game in which each firm competes for the business of a buyer of unknown type by offering the buyer a catalog of products and prices. The timing in our model is Stackelberg: in the first stage, given the distribution of buyer types known to all firms and the deducible, type-dependent best responses of the ...

Nash Equilibrium and Mechanism Design

Commentary: Nash equilibrium and mechanism design

Article history: Received 23 December 2008 Available online 18 January 2009 JEL classification: C70

Nash equilibrium

In game theory, Nash equilibrium (named after John Forbes Nash, who proposed it) is a solution concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing his or...

Search theory, competitive equilibrium, and the Nash bargaining solution

We investigate a canonical search theoretic model of a society, à la Burdett and Wright (1998), in which two agents are randomly matched, facing a pair of nontransferable payoffs drawn randomly from a compact convex set, and choose whether or not to agree to form a partnership, which is formed if and only if both of them agree to do so, subject to a small probability of exogenous break down. As...