Discussion Papers, Department of Business and Management Science, Norwegian School of Economics (NHH)
Strategic pricing of commodities
() and Jan Ub°e
Abstract: In this paper we will consider a setting where a large
number of agents are trading commodity bundles. Assuming that agents of the
same type have a certain utility attached to each transaction, we construct
a statistical equilibrium which in turn implies prices on the different
commodities. Our basic question is then the following: Assume that some
commodities come out with prices that are socially unacceptable. Is it
possible to change these prices systematically if a new type of agents is
paid to enter the market? In the paper we will consider explicit examples
where this can be done.
Keywords: Agent preferences; efficient markets; statistical equilibria; commodity prices; arbitrageurs; (follow links to similar papers)
JEL-Codes: D40; D50; G10; (follow links to similar papers)
14 pages, December 1, 2006
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