Abstract
We consider a pure exchange economy, where for each good several trading institutions are available, only one of which is market-clearing. The other feasible trading institutions lead to rationing. To learn on which trading institutions to coordinate, traders follow behavioral rules of thumb that are based on the past performances of the trading institutions. Given the choice of institutions, market outcomes are determined by an equilibrium concept that allows for rationing. We find that full coordination on the market-clearing institutions without any rationing is a stochastically stable outcome, independently of the characteristics of the alternative available institutions. We also find, though, that coordination on certain other, non-market-clearing institutions with rationing can be stochastically stable.
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We thank two very careful referees for useful comments which greatly improved the paper.
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Alós-Ferrer, C., Kirchsteiger, G. General equilibrium and the emergence of (non)market clearing trading institutions. Econ Theory 44, 339–360 (2010). https://doi.org/10.1007/s00199-009-0466-9
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DOI: https://doi.org/10.1007/s00199-009-0466-9