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Full-Text Articles in Social and Behavioral Sciences
Structure, Clearinghouses And Symmetry, Martin Shubik, Eric Smith
Structure, Clearinghouses And Symmetry, Martin Shubik, Eric Smith
Cowles Foundation Discussion Papers
We introduce and justify a taxonomy for the structure of markets and minimal institutions which appear in constructing minimally complex trading structures to perform the functions of price formation, settlement and payments. Each structure is presented as a playable strategic market game and is examined for its efficiency, the number of degrees of freedom and the symmetry properties of the structure.
Strategic Freedom, Constraint And Symmetry In One-Period Markets With Cash And Credit Payment, Martin Shubik, Eric Smith
Strategic Freedom, Constraint And Symmetry In One-Period Markets With Cash And Credit Payment, Martin Shubik, Eric Smith
Cowles Foundation Discussion Papers
In order to explain in a systematic way why certain combinations of market, financial, and legal structures may be intrinsic to certain capabilities to exchange real goods, we introduce criteria for abstracting the qualitative functions of markets. The criteria involve the number of strategic freedoms the combined institutions, considered as formalized strategic games, present to traders, the constraints they impose, and the symmetry with which those constraints are applied to the traders. We pay particular attention to what is required to make these “strategic market games” well-defined, and to make various solutions computable by the agents within the bounds on …