Partial Equilibrium Analysis in a Market Game:the Strategic Marshallian Cross
AbstractWe show how non-price-taking behavior by agents in partial equilibrium can be analyzed using strategic versions of Marshallian supply and demand curves. There is a Nash equilibrium of a two-good, strategic market game at a given price if and only if the strategic supply and demand curves intersect at that price. This result allows us to prove new existence and uniqueness results for such games, which have previously been obtained only by imposing somewhat restrictive assumptions such as symmetry on each side of the market. It also enables us to show that many conventional comparative statics results of Marshallian analysis survive strategic play by buyers and sellers. Finally, we show that price manipulation in this game always has the effect of reducing supply and demand and that thick markets are almost competitive.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Economic Research, Keele University in its series Keele Economics Research Papers with number KERP 2004/07.
Length: 36 pages
Date of creation: Sep 2004
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
Web page: http://www.keele.ac.uk/depts/ec/cer/
More information through EDIRC
Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-13 (All new papers)
- NEP-COM-2006-05-13 (Industrial Competition)
- NEP-FMK-2006-05-13 (Financial Markets)
- NEP-MIC-2006-05-13 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Cornes & Roger Hartley, 2002.
"Joint Production Games with Mixed Sharing Rules,"
Game Theory and Information
- Hartley, Roger & Richard Cornes, 2003. "Joint Production Games with Mixed Sharing Rules," Royal Economic Society Annual Conference 2003 99, Royal Economic Society.
- Richard Cornes & Roger Hartley, 2002. "Joint Production Games with Mixed Sharing Rules," Keele Economics Research Papers KERP 2002/16, Centre for Economic Research, Keele University.
- Richard Cornes & Roger Hartley, 2002.
"Asymmetric Contests with General Technologies,"
Keele Economics Research Papers
KERP 2002/22, Centre for Economic Research, Keele University.
- Cordella, Tito & Gabszewicz, Jean J., 1998. ""Nice" Trivial Equilibria in Strategic Market Games," Games and Economic Behavior, Elsevier, vol. 22(1), pages 162-169, January.
- Bloch, Francis & Ghosal, Sayantan, 1997.
"Stable Trading Structures in Bilateral Oligopolies,"
Journal of Economic Theory,
Elsevier, vol. 74(2), pages 368-384, June.
- BLOCH, Francis & GHOSAL, Sayantan, 1994. "Stable Trading Structures in Bilateral Oligopolies," CORE Discussion Papers 1994056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Vives, Xavier, 1987. "Small Income Effects: A Marshallian Theory of Consumer Surplus and Downward Sloping Demand," Review of Economic Studies, Wiley Blackwell, vol. 54(1), pages 87-103, January.
- Gabszewicz, Jean J & Grazzini, Lisa, 1999.
" Taxing Market Power,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 1(4), pages 475-97.
- Rabah Amir & Val E. Lambson, 1998.
"On the Effects of Entry in Cournot Markets,"
CIE Discussion Papers
1998-06, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- AMIR, Rabah & LAMBSON, Val, 1999. "On the effects of entry in Cournot markets," CORE Discussion Papers 1999059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rabah Amir, 2000. "On the Effects of Entry in Cournot Markets," Econometric Society World Congress 2000 Contributed Papers 1475, Econometric Society.
- Bloch, Francis & Ferrer, Helene, 2001. "Trade Fragmentation and Coordination in Strategic Market Games," Journal of Economic Theory, Elsevier, vol. 101(1), pages 301-316, November.
- Peck, James & Shell, Karl & Spear, Stephen E., 1992. "The market game: existence and structure of equilibrium," Journal of Mathematical Economics, Elsevier, vol. 21(3), pages 271-299.
- GABSZEWICZ, Jean & MICHEL, Philippe, 1992.
"Oligopoly equilibria in exchange economies,"
CORE Discussion Papers
1992047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gabszewicz, J. & Michel, P., 1992. "Oligopoly Equilibria in Exchange Economies," Papiers d'Economie MathÃÂ©matique et Applications 92.26, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-68, October.
- Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
- Giraud, Gael, 2003. "Strategic market games: an introduction," Journal of Mathematical Economics, Elsevier, vol. 39(5-6), pages 355-375, July.
- Dubey, Pradeep & Shubik, Martin, 1978. "A theory of money and financial institutions. 28. The non-cooperative equilibria of a closed trading economy with market supply and bidding strategies," Journal of Economic Theory, Elsevier, vol. 17(1), pages 1-20, February.
- Ji-Tian Jeng, 2005. "Bayesian-Cournot Competition," Keele Economics Research Papers KERP 2005/01, Centre for Economic Research, Keele University.
- R Cornes & R Hartley, 2005. "The Geometry of Aggregative Games," The School of Economics Discussion Paper Series 0514, Economics, The University of Manchester.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin E. Diedrich) The email address of this maintainer does not seem to be valid anymore. Please ask Martin E. Diedrich to update the entry or send us the correct address.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.