A difficulty in characterising mixed Nash equilibria in a strategic market game

Bailey, Ralph W., Kozlovskaya, Maria and Ray, Indrajit ORCID: https://orcid.org/0000-0001-5254-3144 2024. A difficulty in characterising mixed Nash equilibria in a strategic market game. [Discussion Paper]. CRETA, Department of Economics, University of Warwick.

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Abstract

We analyse the conditions for a strategy profile to be an equilibrium in a specific buy and sell strategic market game, with two goods, using best responses of a player against random bids from the opponents. The difficulty in characterising mixed Nash equilbria is that the expected utility is not quasiconcave in strategies. We still prove that any mixed strategy Nash equilibrium profile in which every player faces only two random bids is trivial, that is, is a convex combination of some pure strategy Nash equilibria; moreover, we show that the outcome (the price and the allocations) is deterministic in such an equilibrium.

Item Type:	Monograph (Discussion Paper)
Status:	Unpublished
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	CRETA, Department of Economics, University of Warwick
Date of First Compliant Deposit:	29 January 2024
Last Modified:	29 Jan 2024 15:00
URI:	https://orca.cardiff.ac.uk/id/eprint/165659

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