Template-Type: ReDIF-Paper 1.0
Author-Name: Alex Dickson
Author-Name-First: Alex
Author-Name-Last: Dickson
Author-Email: alex.dickson@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde 
Author-Name: Roger Hartley
Author-Name-First: Roger
Author-Name-Last: Hartley
Author-Email: roger.hartley@manchester.ac.uk
Author-Workplace-Name: Department of Economics, University of Manchester
Title: Trade in bilateral oligopoly with endogenous market formation
Abstract: 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.
Length: 20 pages
Creation-Date: 2011-02
Revision-Date: 
Publication-Status: 
File-URL: http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/2011/11-04_Final.pdf
File-Format: Application/pdf
Number: 1104
Classification-JEL: C72, D43, D51, L13.
Keywords: Bilateral oligopoly, strategic market game, trade.
Handle: RePEc:str:wpaper:1104