The law of supply in games, markets and matching models

Summary In large games with transferable utility, core payoffs satisfy a comparative statics property: If the proportion of one type of player increases, then the core payoff to that type of player decreases (does not increase). Markets with transferable utility satisfy a similar property: if the aggregate supply of a commodity increases, its value relative to the value of all commodities decreases. In market games, if one type of agent becomes more plentiful, his competitive payoff falls, and its decrease is engineered by a decrease in the relative value of his endowment.We thank Bob Anderson, Joe Farrell, Steve Goldman, Chris Shannon, seminar participants of the Mathematical Economics Seminar at Berkeley (August 1994), the University of Pittsburg (November 1994), Tel Aviv University and the Institute on Rationality at the Hebrew University (January 1995), and especially Vince Crawford for useful discussion.