IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v17y2013i1p27-41.html
   My bibliography  Save this article

Arbitrage, strategic inefficiency and self-regulation

Author

Listed:
  • Dimitris Voliotis

Abstract

This paper develops a multi-period strategic market game in two different settings, one of a finite-period finance economy, and its extension to infinite periods but with overlapping term of traders. Under these two different contexts, we address the possibility of strategies that Pareto improve the outcome of the game. In this effort, both the introduction of a regulation scheme and the innovative role of provision of traders with incentives to self-police these designated strategies play an important role. Copyright Springer-Verlag 2013

Suggested Citation

  • Dimitris Voliotis, 2013. "Arbitrage, strategic inefficiency and self-regulation," Review of Economic Design, Springer;Society for Economic Design, vol. 17(1), pages 27-41, March.
    • Handle: RePEc:spr:reecde:v:17:y:2013:i:1:p:27-41
    DOI: 10.1007/s10058-012-0133-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10058-012-0133-7
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10058-012-0133-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leonidas Koutsougeras & Konstantinos Papadopoulos, 2004. "Arbitrage and equilibrium in strategic security markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 553-568, March.
    2. Dimitrios P Tsomocos & Xavier Freixas & Universitat Pompeu Fabra and CEPR, 2004. "Books vs. Fair Value Accounting in Banking, and Intertemporal Smoothing," Economics Series Working Papers 2004-FE-13, University of Oxford, Department of Economics.
    3. Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-968, October.
    4. Allen, Franklin & Gale, Douglas, 1997. "Financial Markets, Intermediaries, and Intertemporal Smoothing," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 523-546, June.
    5. Dubey, Pradeep & Shubik, Martin, 1978. "A theory of money and financial institutions. 28. The non-cooperative equilibria of a closed trading economy with market supply and bidding strategies," Journal of Economic Theory, Elsevier, vol. 17(1), pages 1-20, February.
    6. Salant, David J., 1991. "A repeated game with finitely lived overlapping generations of players," Games and Economic Behavior, Elsevier, vol. 3(2), pages 244-259, May.
    7. Michihiro Kandori, 1992. "Repeated Games Played by Overlapping Generations of Players," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 81-92.
    8. Gaël Giraud & Sonia Weyers, 2004. "Strategic market games with a finite horizon and incomplete markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 467-491, March.
    9. M. Shubik & D. Tsomocos, 1992. "A strategic market game with a mutual bank with fractional reserves and redemption in gold," Journal of Economics, Springer, vol. 55(2), pages 123-150, June.
    10. Smith, Lones, 1992. "Folk theorems in overlapping generations games," Games and Economic Behavior, Elsevier, vol. 4(3), pages 426-449, July.
    11. Benoit, Jean-Pierre & Krishna, Vijay, 1985. "Finitely Repeated Games," Econometrica, Econometric Society, vol. 53(4), pages 905-922, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hens, Thorsten & Reimann, Stefan & Vogt, Bodo, 2004. "Nash competitive equilibria and two-period fund separation," Journal of Mathematical Economics, Elsevier, vol. 40(3-4), pages 321-346, June.
    2. Dmitry Levando, 2012. "A Survey Of Strategic Market Games," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 57(194), pages 63-106, July - Se.
    3. Bhaskar, V., 1994. "Informational Constraints and the Overlapping Generations Model : Folk and Anti-Folk Theorems," Other publications TiSEM 46a2a327-5203-4940-91e2-2, Tilburg University, School of Economics and Management.
    4. Conconi, Paola & Sahuguet, Nicolas & Zanardi, Maurizio, 2018. "Electoral incentives, term limits, and the sustainability of peace," European Journal of Political Economy, Elsevier, vol. 51(C), pages 15-26.
    5. Xu, Xue, 2018. "Experiments on cooperation, institutions, and social preferences," Other publications TiSEM d3cf4dba-b0f3-4643-a267-7, Tilburg University, School of Economics and Management.
    6. Poutvaara, Panu, 2004. "Gerontocracy revisited: unilateral transfer to the young may benefit the middle-aged," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 161-174, January.
    7. Breton, Michele & St-Amour, Pascal & Vencatachellum, Desire, 2003. "Dynamic production teams with strategic behavior," Journal of Economic Dynamics and Control, Elsevier, vol. 27(5), pages 875-905, March.
    8. V. Bhaskar, 1998. "Informational Constraints and the Overlapping Generations Model: Folk and Anti-Folk Theorems," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 65(1), pages 135-149.
    9. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2004. "The Folk Theorem in Dynastic Repeated Games," Levine's Bibliography 122247000000000577, UCLA Department of Economics.
    10. Paola Conconi & Nicolas Sahuguet & Maurizio Zanardi, 2014. "Democratic Peace And Electoral Accountability," Journal of the European Economic Association, European Economic Association, vol. 12(4), pages 997-1028, August.
    11. Leonidas C. Koutsougeras & Claudia Meo, 2018. "An asymptotic analysis of strategic behavior for exchange economies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(2), pages 301-325, August.
    12. Tarui, Nori, 2007. "Inequality and outside options in common-property resource use," Journal of Development Economics, Elsevier, vol. 83(1), pages 214-239, May.
    13. Gaël Giraud & Hubert Stahn, 2008. "On Shapley–Shubik equilibria with financial markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(3), pages 469-496, June.
    14. Abreu, Dilip & Dutta, Prajit K & Smith, Lones, 1994. "The Folk Theorem for Repeated Games: A NEU Condition," Econometrica, Econometric Society, vol. 62(4), pages 939-948, July.
    15. Jean-Pierre Benoît & Vijay Krishna, 1996. "The Folk Theorems for Repeated Games - A Synthesis," Discussion Papers 96-03, University of Copenhagen. Department of Economics.
    16. Papadopoulos Konstantinos G., 2008. "Purchasing Power Parity with Strategic Markets," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-32, June.
    17. Luca Anderlini & Dino Gerardi & Roger Lagunoff, 2008. "A “Super” Folk Theorem for dynastic repeated games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 37(3), pages 357-394, December.
    18. Kiho Yoon, 2001. "An Anti-folk Theorem in Overlapping Generations Games with Limited Observability," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(3), pages 736-745, July.
    19. Xu, Xue & Potters, Jan, 2018. "An experiment on cooperation in ongoing organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 147(C), pages 28-40.
    20. Helmuts Āzacis, 2020. "Repeated implementation with overlapping generations of agents," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(2), pages 275-299, August.

    More about this item

    Keywords

    Strategic market games; Self-regulation; OLG Folk Theorem; C73; D53; E4; E5; G18;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:17:y:2013:i:1:p:27-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.