A coopetitive approach to financial markets stabilization and risk management

Carfì, David and Musolino, Francesco (2012): A coopetitive approach to financial markets stabilization and risk management.

Abstract

The aim of this paper is to propose a methodology to stabilize the financial markets by adopting Game Theory, in particular, the Complete Study of a Differentiable Game and the new mathematical model of Coopetitive Game, proposed recently in the literature by D. Carfì. Specifically, we will focus on two economic operators: a real economic subject and a financial institute (a bank, for example) with a big economic availability. For this purpose we will discuss about an interaction between the two above economic subjects: the Enterprise, our first player, and the Financial Institute, our second player. The only solution which allows both players to win something, and therefore the only one collectively desirable, is represented by an agreement between the two subjects: the Enterprise artificially causes an inconsistency between spot and future markets, and the Financial Institute, who was unable to make arbitrages alone, because of the introduction by the normative authority of a tax on economic transactions (that we propose to stabilize the financial market, in order to protect it from speculations), takes the opportunity to win the maximum possible collective (social) sum, which later will be divided with the Enterprise by contract. We propose hereunder two kinds of agreement: a fair transferable utility agreement on the an initial natural interaction and a same type of compromise on a quite extended coopetitive context.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Markets and Institutions; Financing Policy; Financial Risk; Financial Crises; Game Theory; Arbitrages; Coopetition
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D53 - Financial Markets; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; G - Financial Economics > G0 - General > G01 - Financial Crises

References

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2. Carfì David, 2009. Complete study of linear infinite games. Proceedings of the International Geometry Center - Prooceeding of the International Conference Geometry in Odessa 2009, Odessa, 25 - 30 May 2009 - vol. 2 n. 3 (2009) http://proceedings.d-omega.org/

3. Carfì David, Ricciardello Angela, Topics in Game Theory, APPS monographs, 2012.

4. Carfì David, 2010. A Model for Coopetitive Games. Paper presented at Sing6, Palermo, July 6-9 - 2010

5. Carfì David, 2009. Differentiable game complete analysis for tourism firm decisions. Proceedings of THE 2009 INTERNATIONAL CONFERENCE ON TOURISM and WORKSHOP on Sustainable tourism within High Risk areas of environmental crisis, Messina, April 22/25 (2009)

6. Carfì David, 2009. Decision-form games. Proceedings of the IX SIMAI Congress, Rome, 22 - 26 September 2008, Communications to SIMAI congress, vol. 3, (2009) pp. 1-12

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