Walrasian equilibrium in matching models

We analyze trading in a model in which the agents and their preferences are the same as in the main models of matching and bargaining, but in which trade is centralized rather than decentralized. We characterize equilibrium when trade is centralized and, by comparing our results with results from the matching literature, we show conditions under which decentralized trading processes reproduce the allocations of our centralized one. We establish that the competitive price as defined in the matching literature (i.e.. relative to the stocks. flows, or totals) coincides, in the appropriate setting, with the equilibrium price in our model. (C) 1998 Elsevier Science B.V.