abstract

Complementary Inputs and the Existence of Stable Outcomes in Large Trading Networks

Author:

Ravi JagadeesanAuthors Info & Claims

EC '17: Proceedings of the 2017 ACM Conference on Economics and Computation

Page 265

https://doi.org/10.1145/3033274.3085113

Published: 20 June 2017 Publication History

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Abstract

This paper studies a model of large trading networks with bilateral contracts. Contracts capture exchange, production, and prices, as well as frictions such as complex taxes and the absence of transfers. In our setting, under standard continuity and convexity conditions, a stable outcome exists in any acyclic network, as long as all firms regard sales as substitutes and the market is large. Thus, complementarities between inputs do not preclude the existence of stable outcomes in large markets, unlike in discrete markets. Even when sales are not substitutable, tree stable outcomes exist in our setting.

The model presented in this paper generalizes and unifies versions of general equilibrium models with divisible and indivisible goods, matching models with continuously divisible contracts, models of large (two-sided) matching with complementarities, and club formation models. Additional results provide intuition for the role of uni-directional substitutability conditions and acyclicity in the main existence results, and explain what kinds of equilibria are guaranteed to exist even when these conditions are relaxed. Unlike in two-sided large-market settings, the sufficient conditions described in this paper pin down maximal domains for the existence of equilibria.

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Greinecker MKah C(2021)Pairwise Stable Matching in Large EconomiesEconometrica10.3982/ECTA1622889:6(2929-2974)Online publication date: 2021
https://doi.org/10.3982/ECTA16228
Nguyen HNguyen TTeytelboym A(2021)Stability in Matching Markets with Complex ConstraintsManagement Science10.1287/mnsc.2020.3869Online publication date: 22-Mar-2021
https://doi.org/10.1287/mnsc.2020.3869
Rostek MYoder N(2020)Matching With Complementary ContractsEconometrica10.3982/ECTA1668688:5(1793-1827)Online publication date: 2020
https://doi.org/10.3982/ECTA16686
Show More Cited By

Index Terms

Complementary Inputs and the Existence of Stable Outcomes in Large Trading Networks
1. Theory of computation
  1. Theory and algorithms for application domains
    1. Algorithmic game theory and mechanism design
      1. Market equilibria
      2. Solution concepts in game theory

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Information & Contributors

Information

Published In

EC '17: Proceedings of the 2017 ACM Conference on Economics and Computation

June 2017

740 pages

ISBN:9781450345279

DOI:10.1145/3033274

General Chair:
Constantinos Daskalakis
Massachusetts Institute of Technology, USA
,
Program Chairs:
Moshe Babaioff
Microsoft Research, Israel
,
Hervé Moulin
University of Glasgow, UK

Permission to make digital or hard copies of part or all of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for third-party components of this work must be honored. For all other uses, contact the Owner/Author.

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 20 June 2017

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Conference

EC '17

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SIGecom

EC '17: ACM Conference on Economics and Computation

June 26 - 30, 2017

Massachusetts, Cambridge, USA

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EC '17 Paper Acceptance Rate 75 of 257 submissions, 29%;

Overall Acceptance Rate 664 of 2,389 submissions, 28%

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Cited By

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Greinecker MKah C(2021)Pairwise Stable Matching in Large EconomiesEconometrica10.3982/ECTA1622889:6(2929-2974)Online publication date: 2021
https://doi.org/10.3982/ECTA16228
Nguyen HNguyen TTeytelboym A(2021)Stability in Matching Markets with Complex ConstraintsManagement Science10.1287/mnsc.2020.3869Online publication date: 22-Mar-2021
https://doi.org/10.1287/mnsc.2020.3869
Rostek MYoder N(2020)Matching With Complementary ContractsEconometrica10.3982/ECTA1668688:5(1793-1827)Online publication date: 2020
https://doi.org/10.3982/ECTA16686
Cseh ÁMatuschke J(2019)New and Simple Algorithms for Stable Flow ProblemsAlgorithmica10.1007/s00453-018-00544-781:6(2557-2591)Online publication date: 17-May-2019
https://dl.acm.org/doi/10.1007/s00453-018-00544-7
Kominers STeytelboym ACrawford V(2017)An invitation to market designOxford Review of Economic Policy10.1093/oxrep/grx06333:4(541-571)Online publication date: 2-Nov-2017
https://doi.org/10.1093/oxrep/grx063
Leshno J(undefined)Stable Matching with Peer-Dependent Preferences in Large Markets: Existence and Cutoff CharacterizationSSRN Electronic Journal10.2139/ssrn.3822060
https://doi.org/10.2139/ssrn.3822060
Gonczarowski YKominers SShorrer R(undefined)A Compact, Logical Approach to Large-Market AnalysisSSRN Electronic Journal10.2139/ssrn.3409828
https://doi.org/10.2139/ssrn.3409828
Azevedo EHatfield J(undefined)Existence of Equilibrium in Large Matching Markets With ComplementaritiesSSRN Electronic Journal10.2139/ssrn.3268884
https://doi.org/10.2139/ssrn.3268884
Hatfield JKominers SNichifor AOstrovsky MWestkamp A(undefined)Full SubstitutabilitySSRN Electronic Journal10.2139/ssrn.3242128
https://doi.org/10.2139/ssrn.3242128
Rostek MYoder N(undefined)Matching with Complementary ContractsSSRN Electronic Journal10.2139/ssrn.3234080
https://doi.org/10.2139/ssrn.3234080
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Stability, Strategy-Proofness, and Cumulative Offer Mechanisms

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