Strategic pricing of commodities

Kurt Jörnsten and Jan Ubøe

No 2006/19, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: In this paper we will consider a setting where a large number of agents are trading commodity bundles. Assuming that agents of the same type have a certain utility attached to each transaction, we construct a statistical equilibrium which in turn implies prices on the different commodities. Our basic question is then the following: Assume that some commodities come out with prices that are socially unacceptable. Is it possible to change these prices systematically if a new type of agents is paid to enter the market? In the paper we will consider explicit examples where this can be done.

Keywords: Agent preferences; efficient markets; statistical equilibria; commodity prices; arbitrageurs (search for similar items in EconPapers)
JEL-codes: D40 D50 G10 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2006-12-01
New Economics Papers: this item is included in nep-cse and nep-mic
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Related works:
Journal Article: Strategic Pricing of Commodities (2009)
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