We study a setting where imitative players are matched into pairs to play a Prisoners’ Dilemma game. A well known result in such setting is that under random matching cooperation vanishes for any interior initial condition. The novelty of this paper is that we consider partial rematching: players that belong to a pair where both parties cooperate repeat partner next period whilst all other play...

We discuss a competitive (labor) market where firms face capacity constraints and individuals differ according to their productivity. Firms offer two-dimensional contracts like wage and task level. Then workers choose firms and contracts. Workers might be rationed if the number of applicants exceeds the capacity of the firm. We show that under reasonable assumptions on the distribution of capac...

Kojima and Ünver (2011) are the first to characterize the class of mechanisms coinciding with the Boston mechanism for some priority order. By mildly strengthening their central axiom, we are able to pin down the Boston mechanism outcome for every priority order. Our main result shows that a mechanism is outcome equivalent to the Boston mechanism at every priority if and only if it respects bot...

We consider a three-stage game in which symmetric firms decide whether to invest in a cost-reducing technology, then they have the possibility to merge (forming coalitions), and eventually, in the third stage, a Cournot oligopoly game is played by the resulting firms (coalitions). We show that, contrary to the existing literature, the monopoly market structure may fail to form even when the num...

In two-sided matching markets in which some doctors form couples, we present an algorithm that finds all the stable matchings whenever one exists, and otherwise shows that there is no stable matching. Extending the methodology of Echenique and Yenmez (2006), we characterize the set of stable matchings as the fixed points of a monotone decreasing function with respect to a certain partial order....

This paper considers a house allocation problem with no initial ownership and where prices are bounded from below and above by exogenously given price restrictions. This type of housing market contains, e.g., the “assignment market” and the “student placement problem” as special cases. A mechanism called the minimal RPE mechanism is defined, and two main results are obtained. First, it is demon...

We show that a profit maximizing monopolistic intermediary may behave approximately like a Walrasian auctioneer by setting bid and ask prices nearly equal to Walrasian equilibrium prices. In our model agents choose to trade either through the intermediary or privately. Buyers (sellers) trading through the intermediary potentially trade immediately at the ask (bid) price, but sacrifice the sprea...

Conditions α and β are two well-known rationality conditions in the theory of rational choice. This paper examines the implications of weaker versions of these two rationality conditions in the context of solutions to nonconvex bargaining problems. It is shown that, together with the standard axioms of efficiency and strict individual rationality, they imply rationalizability of solutions to no...