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Atomic Cournotian Traders May Be Walrasian

Codognato, G.; Ghosal, S.; Tonin, S.

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Authors

G. Codognato

S. Ghosal

S. Tonin



Abstract

In a bilateral oligopoly, with large traders, represented as atoms, and small traders, represented by an atomless part, when is there a nonempty intersection between the sets of Walras and Cournot–Nash allocations? Using a two-commodity version of the Shapley window model, we show that a necessary and sufficient condition for a Cournot–Nash allocation to be a Walras allocation is that all atoms demand a null amount of one of the two commodities. We provide four examples which show that this characterization holds non-vacuously. When our condition fails to hold, we also confirm, through some examples, the result obtained by Okuno et al. (1980): small traders always have a negligible influence on prices, while the large traders keep their strategic power even when their behavior turns out to be Walrasian in the cooperative framework considered by Gabszewicz and Mertens (1971) and Shitovitz (1973).

Citation

Codognato, G., Ghosal, S., & Tonin, S. (2015). Atomic Cournotian Traders May Be Walrasian. Journal of Economic Theory, 159(Part A), 1-14. https://doi.org/10.1016/j.jet.2015.05.005

Journal Article Type Article
Acceptance Date May 11, 2015
Online Publication Date May 21, 2015
Publication Date Sep 1, 2015
Deposit Date Sep 28, 2015
Publicly Available Date Nov 21, 2016
Journal Journal of Economic Theory
Print ISSN 0022-0531
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 159
Issue Part A
Pages 1-14
DOI https://doi.org/10.1016/j.jet.2015.05.005
Keywords Walras equilibrium, Core, Cournot–Nash equilibrium, Mixed exchange economies.
Public URL https://durham-repository.worktribe.com/output/1401922

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