Nash equilibria applied to Spot-financial equilibria in General equilibrium incomplete market models

Fugarolas, Guadalupe (2006): Nash equilibria applied to Spot-financial equilibria in General equilibrium incomplete market models. Unpublished.

Abstract

We consider a two period pure exchange economy with a finite number of states of nature at the second date. The economy consists of a real asset structure and a finite set of durable goods in the initial period that depreciate; we suppose that there is only one single good available in each state of nature at the second date. In this paper, we demonstrate that the spot-financial equilibrium can be obtained as a Nash equilibrium of a market game in which the strategies of the players consist in suggesting prices and quantities for both goods and assets.

• Item Type: MPRA Paper
• Language: English
• Keywords: Incomplete markets; market games; Nash equilibrium; strategic outcome functions
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D52 - Incomplete Markets; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C72 - Noncooperative Games

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