Bid and Ask Prices in Hierarchical Trees
The main problem with the models of Chapter 3 is that in a natural economic environment equilibrium may fail to exist. In particular, this is the case if one considers the simple model of successive monopolies in which all agents are consumers. The reason for this is that the institutional characteristic of mono pricing does not enable the dominating agent to enforce zero trades. Thus, the dominating agent may be forced into trades that are infeasible for him.
KeywordsNash Equilibrium Mixed Strategy Trade Partner Institutional Characteristic Indifference Curve
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