Strategic market games : do market institutions matter for efficiency?
This paper is a reference to certain economic models, which are already published by distinguished economists. These models refer to game theoretic approaches and they describe the different market supply and bidding strategies. Herewith, we want to reveal if and how the institutional intervention may offer another dimension in trading, trying to improve the general equilibrium in an economy with symmetric information. Each model imposes certain rules and regulations that must be followed, which define the behavior and course of action of traders. We shall denote the relation between commodities and money, as well as between price and quantities and how these relations alter, as trade evolves. Therefore, we also refer to the different price formation mechanisms, in a single-period model in contrast with a multi-period model. Furthermore, we shall refer to the role of money, the different kinds of it and we shall also describe how a gearing ratio allows agents to deal with trading opportunities and their resulting obligations respectively. All in all, we reveal the importance of the different strategic equilibria and how these can lead, whenever possible, to Pareto optimality.