We develop a theory of equilibrium market volatility in a general equilibrium duopoly with complete information. The resulting economic system possesses a property, which can be described as ‘natural volatility' of markets, even if players have complete information.Economy is described as a...

We are constructing an imperfect competition general equilibrium model, with non-consumable money and labor market; our toolkit is an equilibrium default model of Shubik-Wilson (1978). Our result has an ‘equilibrium volatility' simultaneously occurring at all three markets: labor, goods, and...

We develop a theory of market instability caused by strategic trade with complete information and without outside shocks. We focus on general equilibrium duopoly as a strategic market game with infinite strategies, and a pricing mechanism. First order conditions of the game are the 1-st kind...

We are developing a theory of equilibrium market instability in a general equilibrium duopoly caused merely by strategic trade. An economy is described as a strategic market game, where players have market power as buyers and sellers. First order conditions of individual decisions are first kind...

We develop a theory of market instability caused by strategic trade with complete information and without outside shocks. We focus on general equilibrium duopoly as a strategic market game with infinite strategies, and a pricing mechanism. First order conditions of the game are the 1-st kind...

Simultaneous research efforts made in 1962 by Gary Becker and Vernon Smith proved that neither rationality nor complete information are necessary market conditions to reach a competitive equilibrium. Although behavioral extensions to this framework have shown significant progress towards a...

Modest differences in higher-order beliefs may have large price effects. We generalize a standard rational expectations equilibrium model with different information by allowing differences in higher-order beliefs. Investors have possibly different dogmatic beliefs about the mean, different...

Treasury futures, important tools in interest risk management, need to maintain price equilibrium between different varieties. In this paper, we conduct research on ten-, five-, and two-year Treasury futures in China's futures market. The auto-regression model is used to fit and predict the spot...

A theory of general economic equilibrium with incomplete financial markets is developed with many new features, including currency-denominated prices which enable treatment of currency-based derivative instruments and collateralized contracts. Prices in such models with standard market structure...

We develop a method that allows one to compute incomplete-market equilibria routinely for Markovian equilibria (when they exist). The main difficulty to be overcome arises from the set of state variables. There are, of course, exogenous state variables driving the economy but, in an incomplete...