Perfect Competition in an Oligoply (including 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. In particular, Nash equilibria are Walrasian even in a bilateral monopoly.

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Year of publication:	2008
Authors:	Dubey, Pradeep ; Sondermann, Dieter
Publisher:	Bonn : University of Bonn, Bonn Graduate School of Economics (BGSE)
Subject:	Auktionstheorie \| Nash-Gleichgewicht \| Allgemeines Gleichgewicht \| Mechanism Design \| Oligopol \| Bilaterales Monopol \| Theorie \| Limit orders \| double auction \| Nash equilibria \| Walras equilibria \| mechanism design

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Series:	Bonn Econ Discussion Papers ; 9/2008
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	587681683 [GVK] hdl:10419/27170 [Handle] RePEc:zbw:bonedp:92008 [RePEc]
Classification:	C72 - Noncooperative Games ; D41 - Perfect Competition ; D44 - Auctions ; D61 - Allocative Efficiency; Cost-Benefit Analysis
Source:	EconStor

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