Trade in bilateral oligopoly with endogenous market formation

Alex Dickson () and Roger Hartley ()
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Roger Hartley: Department of Economics, University of Manchester

No 1104, Working Papers from University of Strathclyde Business School, Department of Economics

Abstract: We study a strategic market game in which traders are endowed with both a good and money and can choose whether to buy or sell the good. We derive conditions under which a non-autarkic equilibrium exists and when the only equilibrium is autarky. Autarky is ‘nice’ (robust to small perturbations in the game) when it is the only equilibrium, and ‘very nice’ (robust to large perturbations) when no gains from trade exist. We characterize economies where autarky is nice but not very nice; that is, when gains from trade exist and yet no trade takes place.

Keywords: Bilateral oligopoly; strategic market game; trade. (search for similar items in EconPapers)
JEL-codes: C72 D43 D51 L13 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-02
New Economics Papers: this item is included in nep-com, nep-gth and nep-int
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Working Paper: Trade in bilateral oligopoly with endogenous market formation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:str:wpaper:1104

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