Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22874
Authors: 
Dubey, Pradeep
Sondermann, Dieter
Year of Publication: 
2003
Series/Report no.: 
Bonn econ discussion papers 2003,26
Abstract: 
We show that if limit orders are required to vary smoothly, then strategic (Nash) equilibria of the double auction mechanism yield competitive (Walras) allocations. It is not necessary to have competitors on any side of any market: smooth trading is a substitute for price wars. In particular, Nash equilibria are Walrasian even in a bilateral monopoly.
Subjects: 
Limit orders
double auction
Nash equilibria
Walras equilibria
perfect competition
bilateral monopoly
mechanism design
JEL: 
D41
C72
D44
D42
D61
Document Type: 
Working Paper

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