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Edgeworth Market Games: Price-Taking and Efficiency

  1. Prabal Roy Chowdhury

Published Online: 15 FEB 2011

DOI: 10.1002/9780470400531.eorms0279

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Chowdhury, P. R. 2011. Edgeworth Market Games: Price-Taking and Efficiency. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. Indian Statistical Institute, Delhi Center, Delhi, India

Publication History

  1. Published Online: 15 FEB 2011

Abstract

This article surveys the Edgeworth market game literature, which formalizes multiagent trading as a game. The key issues are two fold, whether, as the economy becomes large, (i) price-taking emerges, and (ii) whether efficiency is obtained. The focus here is on production economies under partial equilibrium, where the two questions converge to a single one, that is if the equilibrium approximates the competitive one in the limit. We however also discuss related approaches to market games, in particular (i) the cooperative approach, (ii) the trading post literature, and (iii) Cournot competition under general equilibrium.

Keywords:

  • market game;
  • core;
  • Walrasian equilibrium;
  • trading post;
  • price competition;
  • quantity competition;
  • efficiency;
  • price-taking behavior;
  • partial equilibrium;
  • general equilibrium;
  • competitive price;
  • folk theorem