An experimental study of adaptive behavior in an oligopolistic market game

We consider an oligopolistic market game, in which the players are competing firm in the same market of a homogeneous consumption good. The consumer side is represented by a fixed demand function. The firms decide how much to produce of a perishable consumption good, and they decide upon a number of information signals to be sent into the population in order to attract customers. Due to the minimal information provided, the players do not have a well--specified model of their environment. Our main objective is to characterize the adaptive behavior of the players in such a situation.

Single-valued solutions for the Böhm-Bawerk horse market game

Single-valued solutions for the case of two-sided market games without product differentiation, also known as Böhm-Bawerk horse market games, are analyzed. The nucleolus is proved to coincide with the tau-value, and is thus the midpoint of the core. Moreover a characterization of this setof games in terms of the assignment matrix is provided.

Single-valued solutions for the Böhm-Bawerk horse market game

Single-valued solutions for the case of two-sided market games without product differentiation, also known as Böhm-Bawerk horse market games, are analyzed. The nucleolus is proved to coincide with the tau-value, and is thus the midpoint of the core. Moreover a characterization of this setof games in terms of the assignment matrix is provided.

Trade in bilateral oligopoly with endogenous market formation

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.

Auctions of licences and market structure

This paper studies sequential auctions of licences to operate in amarket where those firms that obtain at least one licence then engage ina symmetric market game. I employ a new refinement of Nash equilibrium,the concept of {\sl Markovian recursively undominated equilibrium}.The unique solution satisfies the following properties: (i) when severalfirms own licences before the auction (incumbents), new entrants buylicences in each stage, and (ii) when there is no more than one incumbent,either the single firm preempts entry altogether or entry occurs inevery stage, depending on the parameter configuration.

Market clearing sealed-bid auctions for non-identical objects with single-unit demands

We consider a version of the cooperative buyer-seller market game of Shapley and Shubik (1972). For this market we propose a c1ass of sealed- bid auctions where objects are sold simultaneously at a market c1earing price rule. We ana1yze the strategic games induced by these mechanisms under the complete information approach. We show that these noncooperative games can be regarded as a competitive process for achieving a cooperative outcome: every Nash equilibrium payoff is a core outcome of the cooperative market game. Precise answers can be given to the strategic questions raised.

Capital intangível e direitos de propriedade intelectual : uma análise institucionalista

This paper deals with the main evolutions that explain the emergence of new institutional arrangements that characterize the post-fordism. (i) Hence, I will show that the property rights modifications bring forth new forms of competition;(ii) Also, I will make explicit the concrete expressions of this new competition, as well as how it translates itself in a sub-optimum allocation in the framework of the market game; (iii) I will study the modifications of externalities nature produced by technical progress; (iv) Finally, I will analyze the macroeconomic implications in regard to growth mechanisms and to capital nature.

On Cobb-Douglas Preferences in Bilateral Oligopoly

Bilateral oligopoly is a simple model of exchange in which a finite set of sellers seek to exchange the goods they are endowed with for money with a finite set of buyers, and no price-taking assumptions are imposed. If trade takes place via a strategic market game bilateral oligopoly can be thought of as two linked proportional-sharing contests: in one the sellers share the aggregate bid from the buyers in proportion to their supply and in the other the buyers share the aggregate supply in proportion to their bids. The analysis can be separated into two ‘partial games’. First, fix the aggregate bid at B; in the first partial game the sellers contest this fixed prize in proportion to their supply and the aggregate supply in the equilibrium of this game is X˜ (B). Next, fix the aggregate supply at X; in the second partial game the buyers contest this fixed prize in proportion to their bids and the aggregate bid in the equilibrium of this game is ˜B (X). The analysis of these two partial games takes into account competition within each side of the market. Equilibrium in bilateral oligopoly must take into account competition between sellers and buyers and requires, for example, ˜B (X˜ (B)) = B. When all traders have Cobb-Douglas preferences ˜ X(B) does not depend on B and ˜B (X) does not depend on X: whilst there is competition within each side of the market there is no strategic interdependence between the sides of the market. The Cobb-Douglas assumption provides a tractable framework in which to explore the features of fully strategic trade but it misses perhaps the most interesting feature of bilateral oligopoly, the implications of which are investigated.

Noncooperative Oligopoly in Markets with a Continuum of Traders: A Limit Theorem µa la Cournot

In this paper, we consider an exchange economy µa la Shitovitz (1973), with atoms and an atomless set. We associate with it a strategic market game of the kind first proposed by Lloyd S. Shapley and known as the Shapley window model. We analyze the relationship between the set of the Cournot-Nash equilibrium allocations of the strategic market game and the Walras equilibrium allocations of the exchange economy with which it is associated. We show, with an example, that even when atoms are countably in¯nite, any Cournot-Nash equilibrium allocation of the game is not a Walras equilibrium of the underlying exchange economy. Accordingly, in the original spirit of Cournot (1838), we par- tially replicate the mixed exchange economy by increasing the number of atoms, without a®ecting the atomless part, and ensuring that the measure space of agents remains finite. We show that any sequence of Cournot-Nash equilibrium allocations of the strategic market games associated with the partially replicated exchange economies approximates a Walras equilibrium allocation of the original exchange economy.

Bilateral oligopoly and quantity competition

Bilateral oligopoly is a strategic market game with two commodities, allowing strategic behavior on both sides of the market. When the number of buyers is large, such a game approximates a game of quantity competition played by sellers. We present examples which show that this is not typically a Cournot game. Rather, we introduce an alternative game of quantity competition (the market share game) and, appealing to results in the literature on contests, show that this yields the same equilibria as the many-buyer limit of bilateral oligopoly, under standard assumptions on costs and preferences. We also show that the market share and Cournot games have the same equilibria if and only if the price elasticity of the latter is one. These results lead to necessary and sufficient conditions for the Cournot game to be a good approximation to bilateral oligopoly with many buyers and to an ordering of total output when they are not satisfied.

Vertical Syndication-Proof Competitive Prices in Multilateral Markets

[eng] A multi-sided Böhm-Bawerk assignment game (Tejada, to appear) is a model for a multilateral market with a finite number of perfectly complementary indivisible commodities owned by different sellers, and inflexible demand and support functions. We show that for each such market game there is a unique vector of competitive prices for the commodities that is vertical syndication-proof, in the sense that, at those prices, syndication of sellers each owning a different commodity is neither beneficial nor detrimental for the buyers. Since, moreover, the benefits obtained by the agents at those prices correspond to the nucleolus of the market game, we provide a syndication-based foundation for the nucleolus as an appropriate solution concept for market games. For different solution concepts a syndicate can be disadvantageous and there is no escape to Aumman’s paradox (Aumann, 1973). We further show that vertical syndicationproofness and horizontal syndication-proofness – in which sellers of the same commodity collude – are incompatible requirements under some mild assumptions. Our results build on a self-interesting link between multi-sided Böhm-Bawerk assignment games and bankruptcy games (O’Neill, 1982). We identify a particular subset of Böhm-Bawerk assignment games and we show that it is isomorphic to the whole class of bankruptcy games. This isomorphism enables us to show the uniqueness of the vector of vertical syndication-proof prices for the whole class of Böhm-Bawerk assignment market using well-known results of bankruptcy problems.

Vertical Syndication-Proof Competitive Prices in Multilateral Markets

[eng] A multi-sided Böhm-Bawerk assignment game (Tejada, to appear) is a model for a multilateral market with a finite number of perfectly complementary indivisible commodities owned by different sellers, and inflexible demand and support functions. We show that for each such market game there is a unique vector of competitive prices for the commodities that is vertical syndication-proof, in the sense that, at those prices, syndication of sellers each owning a different commodity is neither beneficial nor detrimental for the buyers. Since, moreover, the benefits obtained by the agents at those prices correspond to the nucleolus of the market game, we provide a syndication-based foundation for the nucleolus as an appropriate solution concept for market games. For different solution concepts a syndicate can be disadvantageous and there is no escape to Aumman’s paradox (Aumann, 1973). We further show that vertical syndicationproofness and horizontal syndication-proofness – in which sellers of the same commodity collude – are incompatible requirements under some mild assumptions. Our results build on a self-interesting link between multi-sided Böhm-Bawerk assignment games and bankruptcy games (O’Neill, 1982). We identify a particular subset of Böhm-Bawerk assignment games and we show that it is isomorphic to the whole class of bankruptcy games. This isomorphism enables us to show the uniqueness of the vector of vertical syndication-proof prices for the whole class of Böhm-Bawerk assignment market using well-known results of bankruptcy problems.

Capital intangível e direitos de propriedade intelectual: uma análise institucionalista

This paper deals with the main evolutions that explain the emergence of new institutional arrangements that characterize the post-fordism. (i) Hence, I will show that the property rights modifications bring forth new forms of competition;(ii) Also, I will make explicit the concrete expressions of this new competition, as well as how it translates itself in a sub-optimum allocation in the framework of the market game; (iii) I will study the modifications of externalities nature produced by technical progress; (iv) Finally, I will analyze the macroeconomic implications in regard to growth mechanisms and to capital nature.

“Financial alchemy” or a zero sum game? Real estate finance, securitisation and the UK property market

Following the US model, the UK has seen considerable innovation in the funding, finance and procurement of real estate in the last decade. In the growing CMBS market asset backed securitisations have included $2.25billion secured on the Broadgate office development and issues secured on Canary Wharf and the Trafford Centre regional mall. Major occupiers (retailer Sainsbury’s, retail bank Abbey National) have engaged in innovative sale & leaseback and outsourcing schemes. Strong claims are made concerning the benefits of such schemes – e.g. British Land were reported to have reduced their weighted cost of debt by 150bp as a result of the Broadgate issue. The paper reports preliminary findings from a project funded by the Corporation of London and the RICS Research Foundation examining a number of innovative schemes to identify, within a formal finance framework, sources of added value and hidden costs. The analysis indicates that many of the gains claimed conceal costs – in terms of market value of debt or flexibility of management – while others result from unusual firm or market conditions (for example utilising the UK long lease and the unusual shape of the yield curve). Nonetheless, there are real gains resulting from the innovations, reflecting arbitrage and institutional constraints in the direct (private) real estate market

Multifractal regime transition in a modified minority game model

The search for more realistic modeling of financial time series reveals several stylized facts of real markets. In this work we focus on the multifractal properties found in price and index signals. Although the usual minority game (MG) models do not exhibit multifractality, we study here one of its variants that does. We show that the nonsynchronous MG models in the nonergodic phase is multifractal and in this sense, together with other stylized facts, constitute a better modeling tool. Using the structure function (SF) approach we detected the stationary and the scaling range of the time series generated by the MG model and, from the linear (non-linear) behavior of the SF we identified the fractal (multifractal) regimes. Finally, using the wavelet transform modulus maxima (WTMM) technique we obtained its multifractal spectrum width for different dynamical regimes. (C) 2009 Elsevier Ltd. All rights reserved.