1. Market Games with Multiple Trading Posts
- Author
-
Leonidas C. Koutsougeras
- Subjects
TheoryofComputation_MISCELLANEOUS ,Trading posts ,law of one price ,business.industry ,jel:C72 ,TheoryofComputation_GENERAL ,Distribution (economics) ,trading posts, law of one price ,Market game ,Zero (linguistics) ,Microeconomics ,Law of one price ,Economics ,business ,Commodity (Marxism) - Abstract
We study market games with multiple posts per commodity. We provide some facts that characterize prices of commodities across posts and show the following results: (i) As the number of agents increases, the price variability across posts for a commodity becomes smaller and it becomes zero when the number of agents becomes inffinite, irrespectively of the distribution of characteristics in the economy. (ii) The set of equilibrium prices and allocations of a market game is a subset of the set of equilibria of another game with more trading posts per commodity. (iii) We demonstrate via an example that the inclusion can be strict, as there are equilibria with price disparities across posts for a commodity which cannot be captured with less trading posts. (iv) One can pass from an equilibrium of a market game into an equilibrium of a game with less trading posts per commodity, by consolidating posts where the price of a commodity is uniform.
- Published
- 2000
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