An adjustment process in a buyer-seller game

Kimmo Berg

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review

Abstract

We give a new approach in modeling the incomplete information in a buyer-seller game. We assume that the seller does not know the buyer's utility function at all. Usually the problem is solved by determining the Bayesian Nash equilibrium of the game, where it is assumed that the buyer's utility function has only some parameters unknown to the seller, and the seller knows the distribution of these parameters. Instead, we assume that the seller faces different types of buyers repeatedly, and the seller learns the buyers' preferences. We present an adjustment process that leads to Bayesian Nash equilibrium by using linear tariffs to extract enough information. This approach motivates the Bayesian Nash equilibrium of the buyer-seller game.
Original languageEnglish
Title of host publicationEuropean Congress on Computational Methods in Applied Sciences and Engineering (ECCOMAS)
Number of pages5
Publication statusPublished - 2004
MoE publication typeA4 Article in a conference publication

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