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.
(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 language | English |
|---|---|
| Pages (from-to) | 745–762 |
| Number of pages | 18 |
| Journal | Manchester School |
| Volume | 81 |
| Issue number | 5 |
| Early online date | 2 Aug 2012 |
| DOIs | |
| Publication status | Published - Sept 2013 |
Keywords
- bilateral oligopoly
- strategic market game
- trade
- autarky
- autarkic equilibria
- strategic market games