Perfect Competition in a Bilateral Monopoly

We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. Inparticular, Nash equilibria are Walrasian even in a bilateral monopoly.

MoreLess

Year of publication:	2003-11
Authors:	Dubey, Pradeep ; Sondermann, Dieter
Institutions:	University of Bonn, Germany
Subject:	Limitorders \| doubleauction \| Nashequilibria \| Walras equilibria \| perfectcompetition \| bilateralmonopoly \| mechanism design

More details

Extent:	application/pdf
Series:	Bonn Econ Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	2 pages long
Classification:	C72 - Noncooperative Games ; D41 - Perfect Competition ; D42 - Monopoly ; D44 - Auctions ; D61 - Allocative Efficiency; Cost-Benefit Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004989637