scholarly journals Exchange Design and Efficiency

Econometrica ◽  
2021 ◽  
Vol 89 (6) ◽  
pp. 2887-2928
Author(s):  
Marzena Rostek ◽  
Ji Hee Yoon
Keyword(s):  
Risk Sharing ◽  
Price Impact ◽  
Competitive Market ◽  
Double Auction ◽  
Market Clearing ◽  
Uniform Price ◽  
Loss Of Information ◽  
Model Based

Most assets clear independently rather than jointly. This paper presents a model based on the uniform‐price double auction which accommodates arbitrary restrictions on market clearing, including independent clearing across assets (allowed when demand for each asset is contingent only on the price of that asset) and joint market clearing for all assets (required when demand for each asset is contingent on the prices of all assets). Additional trading protocols for traded assets—neutral when the market clears jointly—are generally not redundant innovations, even if all traders participate in all protocols. Multiple trading protocols that clear independently can be designed to be at least as efficient as joint market clearing for all assets. The change in price impact brought by independence in market clearing can overcome the loss of information, and enhance diversification and risk sharing. Except when the market is competitive, market characteristics should guide innovation in trading technology.

Experimental Stock Markets with Controlled Risk Preferences

1992 ◽  
Vol 7 (2) ◽  
pp. 117-134 ◽  
Author(s):  
John R. O'Brien
Keyword(s):  
Risk Sharing ◽  
Competitive Equilibrium ◽  
Risk Preferences ◽  
World Market ◽  
Equilibrium Price ◽  
Double Auction ◽  
Pareto Optimal ◽  
Market Institution ◽  
Certainty Equivalents ◽  
Optimal Risk Sharing

In this paper the empirical validity of the binary lottery preference inducing technique is tested in a real world market institution. In each market the potential gains to exchange arise from induced risk preferences, and the predicted competitive equilibrium is equivalent to the Pareto optimal risk sharing allocation. Price convergence to (and near) the competitive equilibrium price was rapid in each market, and most trades were individually rational with respect to induced certainty equivalents. This evidence implies that preferences can be induced in an oral double auction institution, using this technique.

Convergence in Macroeconomics: The Labor Wedge

2009 ◽  
Vol 1 (1) ◽  
pp. 280-297 ◽  
Author(s):  
Robert Shimer
Keyword(s):  
Job Search ◽  
Labor Market Outcomes ◽  
The United States ◽  
Competitive Market ◽  
Market Outcomes ◽  
Marginal Rate ◽  
Market Clearing ◽  
Macroeconomic Models ◽  
Marginal Rate Of Substitution ◽  
Labor Wedge

I review research on the behavior of the labor wedge, the ratio between the marginal rate of substitution of consumption for leisure and the marginal product of labor. According to competitive, market-clearing macroeconomic models, the ratio is easy to measure and should be equal to the sum of consumption and labor taxes. The observation that the wedge is higher in continental Europe than in the United States has proved useful for understanding the extent to which taxes can explain differences in labor market outcomes. The observation that the ratio rises during recessions suggests some failure of competitive, market-clearing macroeconomic models at business cycle frequencies. The latter observation has guided recent research, including work on sticky wage models and job search models. (JEL E24, E32, J64)

Improved Spot Market Clearing model based on DC Power Flow Model Based With PTDF Corrections

2021 ◽  
Author(s):  
Yang Bai ◽  
Zhongfei Chen ◽  
Peng Yu ◽  
Long Wang ◽  
Hui Song ◽  
...  
Keyword(s):  
Power Flow ◽  
Flow Model ◽  
Spot Market ◽  
Market Clearing ◽  
Model Based ◽  
Dc Power

A novel power market clearing model based on the equilibrium principle in microeconomics

2017 ◽  
Vol 142 ◽  
pp. 1021-1027 ◽  
Author(s):  
Jian Deng ◽  
Hai-Bing Wang ◽  
Cheng-Min Wang ◽  
Geng-Wu Zhang
Keyword(s):  
Power Market ◽  
Market Clearing ◽  
Model Based

Towards an Empirical-Relational Model for Supply Chain Innovation

2015 ◽  
Vol 8 (4) ◽  
pp. 14-29 ◽  
Author(s):  
Santanu Mandal
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Environmental Uncertainty ◽  
Competitive Market ◽  
Relational Model ◽  
Exchange Relationships ◽  
Web Based ◽  
Model Based ◽  
Sustainable Performance ◽  
Supply Chain Relationships

Innovation is the key to sustainable performance in the current competitive market. Supply chains being network of firms entangled in exchange relationships; innovation in supply chains cannot be fully achieved without effective supply chain relationships. Hence the current study explores empirically the influence of dominant relational attributes viz. trust, commitment, communication, cooperation, coordination on supply chain (SC) innovation. As environmental uncertainty can moderate these relationships, hence the author includes the same as a moderating variable in the model. Based on a web based survey of 132 logistics professionals, the findings largely provide support for the proposed relationships.

scholarly journals Equilibrium Proofmaking

2001 ◽  
Vol 23 (4) ◽  
pp. 421-442 ◽  
Author(s):  
E. Roy Weintraub ◽  
Ted Gayer
Keyword(s):  
General Equilibrium ◽  
Competitive Equilibrium ◽  
Equilibrium Price ◽  
Competitive Market ◽  
Rite Of Passage ◽  
Price Vector ◽  
Market Clearing ◽  
History Of Economics ◽  
History Of ◽  
As If

Each year, new economics Ph.D. students learn the proof of the existence of a competitive equilibrium as if it were a rite of passage. From the utility-maximizing behavior of consumers and the profit-maximizing behavior of firms, neophyte economists soon can demonstrate that under certain conditions there exists a competitive market-clearing general equilibrium price vector. While there are a number of proofs that establish the existence of such an equilibrium, the validity of these proofs is indubitable. Indeed, economists with even scant knowledge of the history of economics can identify Kenneth J. Arrow and Gerard Debreu's Econometrica paper as having provided the proof that settled the issue.

scholarly journals Optimal Risk Sharing in Society

Mathematics ◽  
2022 ◽  
Vol 10 (1) ◽  
pp. 161
Author(s):  
Knut K. Aase
Keyword(s):  
General Theory ◽  
Risk Sharing ◽  
Economic Effects ◽  
Competitive Market ◽  
Decision Under Uncertainty ◽  
Main Message ◽  
Special Case ◽  
Optimal Risk Sharing ◽  
Reinsurance Market

We consider risk sharing among individuals in a one-period setting under uncertainty that will result in payoffs to be shared among the members. We start with optimal risk sharing in an Arrow–Debreu economy, or equivalently, in a Borch-style reinsurance market. From the results of this model we can infer how risk is optimally distributed between individuals according to their preferences and initial endowments, under some idealized conditions. A main message in this theory is the mutuality principle, of interest related to the economic effects of pandemics. From this we point out some elements of a more general theory of syndicates, where in addition, a group of people are to make a common decision under uncertainty. We extend to a competitive market as a special case of such a syndicate.

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