On the Existence of Pareto Optimal Endogenous Matching

Dai, Darong (2012): On the Existence of Pareto Optimal Endogenous Matching. Published in: Economic Research Guardian , Vol. 2, No. 2

Abstract

In the current paper, we study the asymmetric normal-form game between two heterogeneous groups of populations by employing the stochastic replicator dynamics driven by Lévy process. A new game equilibrium, i.e., the game equilibrium of a stochastic differential cooperative game on time, is derived by introducing optimal-stopping technique into evolutionary game theory, which combines with the Pareto optimal standard leads us to the existence of Pareto optimal endogenous matching.

• Item Type: MPRA Paper
• Language: English
• Keywords: Stochastic differential cooperative game on time; Endogenous matching; Fair matching; Pareto optimality; Adaptive learning
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C70 - General; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium

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