Summary
The research explores the relationship between games and the economic environment in which the games might be embedded. The focus is on a market institution in which agents buy and sell rights to participate in a follow on stage of strategic interaction. The central question posed concems how two different types of processes, the game and the market, interact. The market converges to a competitive equilibrium that is consistent with the Nash equilibrium that obtains in the game, and the convergence of the market to a competitive equilibrium lags the convergence of behaviors in the game to a Nash equilibrium.
We thank Tim Cason and an anonymous referee for thoughtful comments and suggestions. We conducted the research with support from the National Science Foundation and the Laboratory for Experimental Economics and Political Science.
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Plott, C.R., Williamson, D.V. (2001). Markets for contracts: experiments exploring the compatibility of games and markets for games. In: Cason, T., Noussair, C. (eds) Advances in Experimental Markets. Studies in Economic Theory, vol 15. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-56448-2_9
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DOI: https://doi.org/10.1007/978-3-642-56448-2_9
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