Mistakes in Cooperation

The Stochastic Stability of Edgeworth's Recontracting

Dados Bibliográficos

ID9708873
AutoresRoberto Serrano (0000-0001-9335-4702, Brown University and IMDEA‐Ciencias Sociales), Oscar Volij (0000-0003-4724-4240, Iowa State University and Ben‐Gurion University of the Negev)
Ano2008
Volume118
Fascículo532
Páginas1719-1741
Data de publicação2008-10-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2008.02187.x
OpenAlexW3121542663
IdiomaEN
Citações recebidas2
Referências citadas32

In an exchange economyw ith a finite number of indivisible goods, we analyze a dynamic trading process of coalitional recontracting where agents may make mistakes with small probability. We show first that the recurrent classes of the unperturbed (mistakefree) process consist of (i) all core allocations as absorbing states, and (ii) cycles of non-core allocations. Next, we introduce a perturbed process, where the resistance of each transition is a function of the number of agents that make mistakes –do not improve– in the transition and of the seriousness of each mistake. If preferences are always strict, we show that the unique stochasticallystable state of the perturbed process is the Walrasian allocation. In economies with indifferences, non-core cycles are sometimes stochastically stable, while some core allocations are not

Commit · Core (optical fiber · Economics · Finite set · Function (biology · Mathematical economics · Mathematical optimization · Mistake · Process (computing · Robustness (evolution · Stability (learning theory · Computer Science · Economic theories and models · Game Theory and Applications · Game Theory and Voting Systems · Law · Mathematics