A strategic market game with limit prices. (Q1401110)

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scientific article; zbMATH DE number 1965140
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    A strategic market game with limit prices.
    scientific article; zbMATH DE number 1965140

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      A strategic market game with limit prices. (English)
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      17 August 2003
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      The author analyzes a market game for the case of two goods which is based on the limit-price mechanism proposed by Mertens. It is a mechanism for determining prices and final allocations when the players trade a finite number of goods by placing an arbitrary number of market or limit orders. The limit-price mechanism allows the players to refuse to trade at unfavorable prices. The case of a no-trade equilibrium is examined, where no one offers to sell or buy anything. It is shown that the no-trade equilibrium is robust in the sense that it is a Nash equilibrium in undominated strategies of all the replicated games.
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      no-trade equilibrium
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      Nash equilibrium
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      undominated strategy
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