Resource title

Strategic market games with a finite horizon and incomplete markets

Resource image

image for OpenScout resource :: Strategic market games with a finite horizon and incomplete markets

Resource description

The authors study a strategic market game associated to an intertemporal with a finite horizon and incomplete markets. They demonstrate that generically, for any finite number of players, every sequentially strictly individually rational and default-free stream of allocations can be approxiamted by a full subgame-perfect equilibrium. As a consequence, imperfect competition may Pareto-dominate perfect competition, when markets ar eincomplete. Moreover, and this contrasts with the main message conveyed by the market games literature, there exists a large open set initial endowments for which full subgame perfect equilibria do not coverge to n-efficient allocations, when the number of players tends to infinity. Finally, strategic speculative bubbles mar survive at full subgame perfect equilibria.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2002/2002-12.pdf

Resource license

Copyright INSEAD. All rights reserved