1. Game theory model for European government bonds market stabilization: a saving-State proposal
- Author
-
Carfì, David and Musolino, Francesco
- Subjects
jel:G1 ,jel:G2 ,jel:E4 ,Game theory ,Government bonds ,European Central Bank ,Spread ,Tax ,Speculation ,jel:C7 - Abstract
The aim of this paper is to present a proposal regarding the possible stabilization of the rapid variations on the value of government bonds issued by the States, using the ``Game Theory". In particular, we focus our attention on three players: a large bank that has immediate access to the market of government bonds (hereinafter called Speculator, our first player), the European Central Bank (ECB, the second player) and the State in economic difficulty (our third player). We propose on financial transactions the introduction of a tax (cashed directly by the State in economic difficulty), which hits only the speculative profits. We show that the above tax would probably be able to avert the speculation, and, even in case of speculation on its government bonds, the State manages to pull itself out of the crisis. Finally, we also propose a cooperative solution that enables all economic actors involved (the Speculator, the ECB and the State) to obtain a profit.
- Published
- 2012