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Information, ambiguity and price equilibrium

Author

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  • R. R. Routledge

    (University of Liverpool)

Abstract

This work analyzes a price choice game with discontinuous payoffs in which sellers may have asymmetric information about the state of the market. The prices which sellers post in the market must be measurable with respect to their private information and sellers are assumed to have ex ante maximin expected utilities. Easily verified conditions upon the primitives which guarantee the existence of a pure strategy price equilibrium in the game, under both equal sharing and winner-takes-all sharing at price ties, are presented. The existence proofs are direct and constructive.

Suggested Citation

  • R. R. Routledge, 2017. "Information, ambiguity and price equilibrium," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 199-214, October.
    • Handle: RePEc:spr:etbull:v:5:y:2017:i:2:d:10.1007_s40505-017-0114-7
    DOI: 10.1007/s40505-017-0114-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Asymmetric information; Discontinuous payoffs; Ambiguity; Maximin utilities; Price equilibrium; Ex ante payoffs;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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