The law of one price in a modified strategic market game

Nicholas Ziros ()
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Nicholas Ziros: University of Cyprus

Economic Theory Bulletin, 2015, vol. 3, issue 2, No 9, 233-241

Abstract: Abstract This paper modifies the norms of the strategic market game with multiple trading posts to allow for the distinction of the two roles of prices. In particular, we propose a model with two discrete (endogenous formatted) prices, where prices $$p$$ p help in the assignment of goods in each distinct trading post, whereas prices $$\pi $$ π evaluate the total sales for a commodity. Under this modification, the main result indicates that the disparities of market-clearing prices across trading posts are not compatible with the Nash equilibrium.

Keywords: Strategic market games; Multiple trading posts; Law of one price (search for similar items in EconPapers)
JEL-codes: C72 D43 D50 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s40505-014-0052-6

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