Retrading in market games
UNSPECIFIED. (2004) Retrading in market games. JOURNAL OF ECONOMIC THEORY, 115 (1). pp. 151-181. ISSN 0022-0531Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/S0022-0531(03)00102-9
When agents are not price takers, they typically cannot obtain an efficient real location of resources in one round of trade. This paper presents a non-cooperative model of imperfect competition where agents can retrade allocations, consistent with Edgeworth's idea of recontracting. We show (a) there are Pareto optimal allocations, including competitive equilibrium allocations, that can be approximated arbitrarily closely when trade is myopic, i.e., when agents play a static Nash equilibrium at every round of retrading; (b) any converging sequence of allocations generated by myopic retrading can be supported along some retrade-proof subgame perfect equilibrium path when traders anticipate future rounds of trading. (C) 2003 Elsevier Science (USA). All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Journal or Publication Title:||JOURNAL OF ECONOMIC THEORY|
|Publisher:||ACADEMIC PRESS INC ELSEVIER SCIENCE|
|Number of Pages:||31|
|Page Range:||pp. 151-181|
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