The bargaining process is a critical part of the model. Due to the information asymmetry, we cannot use the simple surplus sharing solutions that are common in the search literature. Instead, we assume that the buyer has all the bargaining power and offers a general mechanism which the seller...

We show that there exists a unique equilibrium in monotone strategies. We characterize equilibrium behavior for given levels of frictions. We show that new buyers experiment with low bids initially. Over time, the fact that the buyer is loosing provides bad news about the state of the world,...

We consider a simple bilateral trading game between a seller and a buyer who have private valuations for an indivisible good. The seller makes a price offer which the buyer can either accept or reject. If the seller can observe the valuation of the buyer (if information is symmetric), then the...

Dynamic matching and bargaining games provide models of decentralized markets with trading frictions. A central objective of the literature is to investigate how equilibrium outcomes depend on the size of the frictions. In particular, will the outcome become efficient when frictions become...

We embed a two-sided matching market with non-transferable utility, a marriage market, into a random search model. We study steadystate equilibria and characterize the limit of the corresponding equilibrium matchings as exogenous search frictions become small. The central question is whether the...

Dynamic matching and bargaining games are models of decentralized markets with trading frictions. A central objective is to investigate how equilibrium outcomes depend on the level of frictions. In particular, does the trading outcome become Walrasian when frictions become small? Existing...

A buyer seeks to procure a service and solicits bids from sellers. The cost of the service depends on characteristics that are only known to the buyer ("common values"). The buyer can choose how many bids to solicit and the number of solicited bids cannot be disclosed verifiably. We characterize...