Nash equilibria applied to Spot-financial equilibria in General equilibrium incomplete market models
AbstractWe consider a two period pure exchange economy with a finite number of states of nature at the second date. The economy consists of a real asset structure and a finite set of durable goods in the initial period that depreciate; we suppose that there is only one single good available in each state of nature at the second date. In this paper, we demonstrate that the spot-financial equilibrium can be obtained as a Nash equilibrium of a market game in which the strategies of the players consist in suggesting prices and quantities for both goods and assets.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 470.
Date of creation: Sep 2006
Date of revision:
Incomplete markets; market games; Nash equilibrium; strategic outcome functions;
Find related papers by JEL classification:
- D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-GTH-2006-11-12 (Game Theory)
- NEP-MIC-2006-11-12 (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.:
- Radner, Roy, 1972. "Existence of Equilibrium of Plans, Prices, and Price Expectations in a Sequence of Markets," Econometrica, Econometric Society, vol. 40(2), pages 289-303, March.
- Gerard Debreu, 1961. "New Concepts and Techniques for Equilibrium Analysis," Cowles Foundation Discussion Papers 129, Cowles Foundation for Research in Economics, Yale University.
- Hart, Oliver D., 1975. "On the optimality of equilibrium when the market structure is incomplete," Journal of Economic Theory, Elsevier, vol. 11(3), pages 418-443, December.
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