Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27170
Authors: 
Dubey, Pradeep
Sondermann, Dieter
Year of Publication: 
2008
Series/Report no.: 
Bonn econ discussion papers 2008,9
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
mechanism design
JEL: 
C72
D41
D44
D61
Document Type: 
Working Paper

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