Strategic Pricing of Commodities

Kurt Jörnsten and Jan Ubøe

Applied Mathematical Finance, 2009, vol. 16, issue 5, 385-399

Abstract: We 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. Assuming that some commodities come out with prices that are socially unacceptable, is it possible to change these prices systematically if a new type of agent is paid to enter the market? 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)
Date: 2009
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Working Paper: Strategic pricing of commodities (2006)
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DOI: 10.1080/13504860802639261

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