SFB 303 Discussion Paper No. A - 131

Author: Kamecke, Ulrich
Title: Non-cooperative Matching and Distribution Games
Abstract: Suppose there are two groups of agents facing a „marriage“ problem where a continous variety of efficient payoffs can be distributed between each two members of the opposite groups. In an allocation each player realizes a payoff either alone or with the partner he is matched to.The paper proposes a non-cooperative extension to a simple distribution game decentralizing all stable (core) solutions to the problem as Nash- equilibria. It is argued that such a symmetric matching market can be expected to be organized asymmetrically. One group of players announces the payoff that they are willing to accept while the members of the other group address their demands to an opponent.In an extended version of the game the equilibrium selection problem can be reduced. If the passive players' announcements are fixed exogeneously and if the active players are allowed to readdress unsuccessful demands, then there is only one equilibrium payoff left. The active players prefer their equilibrium payoffs to all other core allocations.
Creation-Date: September 1987
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