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Titolo:
ARBITRAGE AND THE FLATTENING EFFECT OF LARGE NUMBERS
Autore:
MAKOWSKI L; OSTROY JM;
Indirizzi:
UNIV CALIF DAVIS,DEPT ECON DAVIS CA 95616 UNIV CALIF LOS ANGELES,DEPT ECON LOS ANGELES CA 90024
Titolo Testata:
Journal of economic theory
fascicolo: 1, volume: 78, anno: 1998,
pagine: 1 - 31
SICI:
0022-0531(1998)78:1<1:AATFEO>2.0.ZU;2-9
Fonte:
ISI
Lingua:
ENG
Soggetto:
EQUILIBRIUM; MARKET; MODEL;
Tipo documento:
Article
Natura:
Periodico
Settore Disciplinare:
Physical, Chemical & Earth Sciences
Citazioni:
28
Recensione:
Indirizzi per estratti:
Citazione:
L. Makowski e J.M. Ostroy, "ARBITRAGE AND THE FLATTENING EFFECT OF LARGE NUMBERS", Journal of economic theory, 78(1), 1998, pp. 1-31

Abstract

In a model of an exchange economy with a continuum of individuals, weshow that competitive equilibrium can be regarded as resulting from the elimination of arbitrage opportunities. Generically, the elimination of such opportunities results in a phenomenon we call the ''flattening effect of large numbers. '' The flattening effect provides a precisemeaning to the statement that under perfect competition individuals cannot influence prices; they face perfectly elastic demands and supplies. The attractive geometry associated with arbitrage and the flattening effect is highlighted in several figures. We also link the demonstration of equilibrium through arbitrage with the logic of marginalism. (C) 1998 Academic Press.

ASDD Area Sistemi Dipartimentali e Documentali, Università di Bologna, Catalogo delle riviste ed altri periodici
Documento generato il 01/12/20 alle ore 09:14:09