Abstract: We study markets of indivisible items in which price-based (Walrasian) equilibria often do not exist due to the discrete non-convex setting. Instead we consider Nash equilibria of the market viewed as a game, where players bid for items, and where the highest bidder on an item wins it and pays his bid. We first observe that pure Nash-equilibria of this game excatly correspond to price-based equilibiria (and thus need not exist), but that mixed-Nash equilibria always do exist, and we analyze their structure in several simple cases where no price...
(read more)
Topics: 
Microeconomics
Industrial organization