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Price Dynamics and the Market for Access to Trading Partners

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  • Michael Sattinger

Abstract

At each point in time, price dynamics in a market are determined by a market for access to trading partners, implemented by competitive profit-maximizing brokers. This mechanism is applied to a market in which the value of a good declines over time and buyers decide optimally when to reenter the market and buy a new unit. Price adjustment paths in response to increases and decreases in demand are then derived using the differential equations generated by the model.

Suggested Citation

  • Michael Sattinger, 2003. "Price Dynamics and the Market for Access to Trading Partners," Discussion Papers 03-10, University at Albany, SUNY, Department of Economics.
    • Handle: RePEc:nya:albaec:03-10
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    File URL: http://www.albany.edu/~ms339/PriceDynamics.pdf
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