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Convergence to No Arbitrage Equilibria in Market Games

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Author Info
Leonidas C. Koutsougeras (University of Manchester)
Abstract

For market games which feature multiple posts for each commodity we show the following: (i) the 'law of one price' obtains asymptotically as the number of market participants becomes infinite, irrespectively of the characteristics of market participants; (ii) as the number of markets increases the set of equilibria is nested upwards.

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Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 02-12.

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Length: 23 pages
Date of creation: Oct 2002
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Handle: RePEc:kud:kuiedp:0212

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Related research
Keywords: multiple posts; arbitrage; law of one price;

Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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  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. [Downloadable!] (restricted)
  2. BLOCH, Francis & FERRER, HŽlne, 1999. "Trade fragmentation and coordination in bilateral oligopolies," CORE Discussion Papers 1999008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  3. Martin Shubik, 1977. "A Theory of Money and Financial Institutions," Cowles Foundation Discussion Papers 462, Cowles Foundation, Yale University. [Downloadable!]
  4. Postlewaite, A & Schmeidler, David, 1978. "Approximate Efficiency of Non-Walrasian Nash Equilibria," Econometrica, Econometric Society, vol. 46(1), pages 127-35, January. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. Amir, Rabah & Sahi, Siddharta & Shubik, Martin & Yao, Shuntian, 1990. "A strategic market game with complete markets," Journal of Economic Theory, Elsevier, vol. 51(1), pages 126-143, June. [Downloadable!] (restricted)
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