Bargaining Foundations for Price Taking in Matching Markets

• 成果类型: Article; Early Access
• 署名作者: Elliott, Matthew; Talamas, Eduard
• 署名单位: University of Cambridge; University of Navarra; IESE Business School
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12776
• 发表日期: 2025
• 关键词: investment; EFFICIENCY; search; equilibrium; assignment

摘要

Agents make noncontractible investments before bargaining over who matches with whom and their terms of trade. An agent is a price taker when her investments do not change her potential partners' payoffs. This incentivizes socially optimal investments. Across a variety of noncooperative bargaining models featuring dynamic entry, we show that everyone necessarily becomes a price taker as the discount factor goes to 1 if there is a minimal amount of competition always present in the market. If this condition is not satisfied, dynamic entry need not create enough competition to guarantee price taking even if agents are arbitrarily patient.