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Local coordination and market equilibria
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UNSPECIFIED (2004) Local coordination and market equilibria. JOURNAL OF ECONOMIC THEORY, 114 (2). pp. 255-279. doi:10.1016/S0022-0531(03)00105-4 ISSN 0022-0531.
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Official URL: http://dx.doi.org/10.1016/S0022-0531(03)00105-4
Abstract
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 | ||||
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Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
Journal or Publication Title: | JOURNAL OF ECONOMIC THEORY | ||||
Publisher: | ACADEMIC PRESS INC ELSEVIER SCIENCE | ||||
ISSN: | 0022-0531 | ||||
Official Date: | February 2004 | ||||
Dates: |
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Volume: | 114 | ||||
Number: | 2 | ||||
Number of Pages: | 25 | ||||
Page Range: | pp. 255-279 | ||||
DOI: | 10.1016/S0022-0531(03)00105-4 | ||||
Publication Status: | Published |
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