A Note on Learning to Bid Walrasian in 2x2 Market Games. There is a large number of agents so that the Walrasian allocation of the underlying exchange economy can be supported by a Nash equilibrium of the game. Instead of being fully rational, consumers myopically imitate bids that were successful in giving a higher payoff for their type in the previous period and they occasionally experiment. In the case of a unique interior Walrasian equilibrium we demonstrate that the long run outcome of the stochastic imitation process corresponds to the Walrasian equilibrium of the underlying economy. We study an evolutionary model in which heterogenous, boundedly rational agents interact locally in order to play a coordination game.
Agents differ in their mobility with mobile agents being able to relocate within a country.
We find that mobile agents enjoy a higher payoff and always benefit from increased mobility, while immobile agents benefit from increased mobility at low levels of mobility only. This wedge in payoffs weakly increases as mobility increases. Some extensions are discussed. The previous literature on search or matching models of monetary exchange assumes that agents meet exogenously and at random. We construct a framework where agents choose who they meet endogenously.