Markets, Correlation, and Regret-Matching
Sergiu Hart and Andreu Mas-Colell
Inspired by the existing work on correlated equilibria and
regret-based dynamics in games, we carry out a first exploration of the
links between the leading equilibrium concept for (exchange) economies,
Walrasian equilibrium, and the dynamics, specifically regret-matching
dynamics, of trading games that fit the economic structure and have the
property that their pure Nash equilibria implement the Walrasian
outcomes. Interestingly, in the case of quasilinear utilities (or
"transferable utility"), all the concepts essentially coincide, and we
get simple deterministic dynamics converging to Walrasian outcomes.
Connections to sunspot equilibria are also studied.
- First version: December 2009
- Games and Economic Behavior 93 (2015), 42-58