Strategic Freedom, Constraint, and Symmetry in One-period Markets with Cash and Credit Payment
Martin Shubik and
David Eric Smith ()
Additional contact information
David Eric Smith: Santa Fe Institute, Economics
Yale School of Management Working Papers from Yale School of Management
Abstract:
In order to explain in a systematic way why certain combinations of market, financial, and legal structures may be intrinsic to certain capabilities to exchange real goods, we introduce criteria for abstracting the qualitative functions of markets. The criteria involve the number of strategic freedoms the combined institutions, considered as formalized strategic games, present to traders, the constraints they impose, and the symmetry with which those constraints are applied to the traders. We pay particular attention to what is required to make these "strategic market games" well-defined, and to make various solutions computable by the agents within the bounds on information and control they are assumed to have. As an application of these criteria, we present a complete taxonomy of the minimal one-period exchange economies with symmetric information and inside money. A natural hierarchy of market forms is observed to emerge, in which institutionally simpler markets are often found to be more suitable to fewer and less-diversified traders, while the institutionally richer markets only become functional as the size and diversity of their users gets large.
Keywords: Strategic Market Games; Clearinghouses; Credit Evaluation; Default (search for similar items in EconPapers)
JEL-codes: C7 D40 D50 G10 G20 L10 (search for similar items in EconPapers)
Date: 2004-07-28
References: Add references at CitEc
Citations:
Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=412496 (application/pdf)
Related works:
Journal Article: Strategic freedom, constraint, and symmetry in one-period markets with cash and credit payment (2005) 
Working Paper: Strategic Freedom, Constraint, and Symmetry in One-period Markets with Cash and Credit Payment (2003) 
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:ysm:somwrk:ysm379
Access Statistics for this paper
More papers in Yale School of Management Working Papers from Yale School of Management Contact information at EDIRC.
Bibliographic data for series maintained by ().