Strategic Behavior in Small Markets

这个项目研究经济主体的战略行为如何在小市场中塑造均衡结果。它由三部分组成。(1)第一种是双边谈判，当讨价还价的双方可以选择停止谈判并寻找另一个谈判伙伴时。该项目试图表明，外部期权的存在将均衡双边讨价还价行为从本质上的不确定转变为本质上的确定。具有双边谈判的分散市场的效率也与具有多边谈判的集中式市场进行比较。(2)双寡头企业通过边做边学降低成本的行为研究。在每个阶段，每个企业都会决定其生产的力度，以便进一步降低成本。目标是刻画当学习很重要时可能存在的各种子博弈完美均衡。(3)第三部分涉及经济主体在动态博弈中对启发式规则的使用。启发式近似于代理在完全理性的情况下会使用的值函数。我们的目标是理解这种有限理性代理人的存在如何改变一组均衡。这项研究之所以重要，是因为它解决了讨价还价理论的基本局限性之一，即不完全信息的双边讨价还价理论无法以一种有趣的方式缩小与至少一个合理均衡相容的广泛结果范围。本项目第一部分的贡献来自于探索谈判问题中被忽视的一个方面，该方面可以提供确定的解决方案。传统的双边、不完全信息讨价还价模型忽视了讨价还价者所拥有的选项，即与特定合作伙伴的谈判中断，与外部的新合作伙伴讨价还价。该项目研究了具有外部期权明确模型的双边不完全信息讨价还价。研究人员的初步工作表明，在讨价还价模型中引入外部期权可能会消除标准模型中的不确定性。这项研究应该为经济学中的许多讨价还价问题提供有用的新分析工具和有价值的实质性见解。

This project studies how the strategic behavior of economic agents shapes equilibrium outcomes within small markets. It has three parts. (1) The first is bilateral bargaining when the bargainers have the option to break off the bargaining and seek another bargaining partner. The project seeks to show that the presence of this outside option changes equilibrium bilateral bargaining behavior from being essentially indeterminate to being essentially determined. The efficiency of decentralized markets with bilateral bargaining is also compared to centralized markets with multilateral bargaining. (2) The second part is the study of the behavior of duopolists whose costs are declining through learning- by-doing. Each period each firm decides how aggressively it should produce so as to reduce its costs further. The goal is to characterize the variety of subgame perfect equilibria that can exist when learning is important. (3) The third part involves the use of heuristics by economic agents within dynamic games. A heuristic approximates the value function that the agent would use if he or she were perfectly rational. The goal is to understand how the presence of such boundedly rational agents changes the set of equilibria. This research is important because it addresses one of the basic limitations in bargaining theory, i.e., bilateral bargaining theory with incomplete information has been unable to narrow in an interesting way the wide range of outcomes that are compatible with at least one reasonable equilibrium. The contribution from the first part of this project comes from exploring a neglected aspect of the bargaining problem that could provide determinate solutions. Conventional models of bilateral, incomplete information bargaining neglect the option bargainers have of breaking-off bargaining with a particular partner and bargaining with a new partner from the outside. The project studies bilateral, incomplete information bargaining with the outside option explicitly modeled. Preliminary work by the investigator demonstrates that introducing the outside option in bargaining models may eliminate the indeterminacy found in standard models. The research should provide useful new analytical tools and valuable substantive insights into the many bargaining problems in economics.