On 'nice' and 'very nice' autarkic equilibria in strategic market games

Alexander Dickson, Roger Hartley

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

We study a strategic market game in which traders are endowed with both a good and money and can choose whether to buy or sell the good. We derive conditions under which a non-autarkic equilibrium exists and when the only equilibrium is autarky. Autarky is ‘nice’
(robust to small perturbations in the game) when it is the only equilibrium, and ‘very nice’ (robust to large perturbations) when no gains from trade exist. We characterize economies where autarky is nice but not very nice; that is, when gains from trade exist and yet no trade takes place.
Original languageEnglish
Pages (from-to)745–762
Number of pages18
JournalManchester School
Volume81
Issue number5
Early online date2 Aug 2012
DOIs
Publication statusPublished - Sep 2013

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Keywords

  • bilateral oligopoly
  • strategic market game
  • trade
  • autarky
  • autarkic equilibria
  • strategic market games

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