Arbitrage equilibria in large games with many commodities

Toraubally, W.A. ORCID: 0000-0002-2684-7360, 2019. Arbitrage equilibria in large games with many commodities. Economics Letters, 179, pp. 24-28. ISSN 0165-1765

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Abstract

Can identical goods sell at different prices in identical markets when people are perfectly mobile? We provide a formal account of strategic behaviour in large games with many commodities, and exhibit how it drives price dispersion at equilibrium. Interactions between agents are modelled using a Shapley-Shubik market game. We demonstrate the failure of the law of one price in this setup through a robust counterexample. The proposed model, and our findings, constitute an alternative and plausible explanation to some "anomalies" which routinely appear in a wide array of fields, ranging from banking, business economics, to international, and labour economics.

Item Type: Journal article
Publication Title: Economics Letters
Creators: Toraubally, W.A.
Publisher: Elsevier
Date: June 2019
Volume: 179
ISSN: 0165-1765
Identifiers:
NumberType
10.1016/j.econlet.2019.03.004DOI
1532039Other
Divisions: Schools > Nottingham Business School
Record created by: Jonathan Gallacher
Date Added: 08 Apr 2022 14:11
Last Modified: 08 Apr 2022 14:11
URI: http://irep.ntu.ac.uk/id/eprint/46079

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