The strategic Marshallian cross

We show how opportunities for strategic manipulation in partial equilibrium can be analyzed using strategic versions of Marshallian supply and demand curves. With a …nite set of players on each side of the market, non-trivial Nash equilibria of games are in 1–1 correspondence with intersections of the strategic supply and demand curves. This equivalence can be used to derive a threshold condition for existence of an equilibrium and further conditions that guarantee the existence of a unique coalition proof equilibrium even when the players are heterogeneous. It also enables us to investigate which of the conventional comparative statics results of Marshallian analysis survive strategic price manipulation by buyers and sellers. Finally, we show that strategic manipulation is always achieved by withholding goods or money and that the possibility for such play diminishes under replication and vanishes in the limit.