Local coordination and market equilibria
UNSPECIFIED (2004) Local coordination and market equilibria. JOURNAL OF ECONOMIC THEORY, 114 (2). pp. 255-279. ISSN 0022-0531Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/S0022-0531(03)00105-4
We reformulate the local stability analysis of market equilibria in a competitive market as a local coordination problem in a market game, where the map associating market prices to best-responses of all traders is common knowledge and well-defined both in and out of equilibrium. Initial expectations over market variables differ from their equilibrium values and are not common knowledge. This results in a coordination problem as traders use the structure of the market game to converge back to equilibrium. We analyse a simultaneous move and a sequential move version of the market game and explore the link with local rationalizability. (C) 2003 Elsevier Inc. 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:||25|
|Page Range:||pp. 255-279|
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