Strategic Market Games with a Finite Horizon and Incomplete Markets

Gaël Giraud and Sonia Weyers
Additional contact information
Sonia Weyers: INSEAD - Institut Européen d'administration des Affaires

Post-Print from HAL

Abstract: We study a strategic market game associated to an intertemporal economy with a finite horizon and incomplete markets. We demonstrate that generically, for any finite number of players, every sequentially strictly individually rational and default-free stream of allocations can be approximated by a full subgame-perfect equilibrium. As a consequence, imperfect competition may Pareto-dominate perfect competition when markets are incomplete. Moreover - and this contrasts with the main message conveyed by the market games literature - there exists a large open set of initial endowments for which full subgame-perfect equilibria do not converge to n-efficient allocations when the number of players tends to infinity. Finally, strategic speculative bubbles may survive at full subgame-perfect equilibria.

Keywords: Strategic market games; Folk theorem; Incomplete markets; Bubbles (search for similar items in EconPapers)
Date: 2004-03
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published in Economic Theory, 2004, 23 (3), pp.467-491. ⟨10.1007/s00199-003-0389-9⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Strategic market games with a finite horizon and incomplete markets (2004)
Working Paper: Strategic Market Games with a Finite Horizon and Incomplete Markets (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00279003

DOI: 10.1007/s00199-003-0389-9

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().