The author reviews the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system: a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system. That this trade-off exists is not clear. Market p...

We study the steady state of a market with incoming cohorts of buyers and sellers who are matched pairwise and bargain under private information. A friction parameter is τ , the length of the time period until the next meeting. We provide a necessary and sufficient condition for the convergence of mechanism outcomes to perfect competition at the linear rate in τ , which is shown to be the faste...

There is robust evidence in the experimental economics literature showing that monopoly power affected by trading institutions. In this paper, we study whether institutions themselves can shape agents' market behavior through formation of anchors. We recreate experimentally five different double-auction structures (perfect competition, perfect competition with quotas, cartel on price, price and...

Why do private firms invest in innovation? Surely the answer to this question is related to the benefits that firms obtain from improving their technology or production processes. In particular, the rate of innovation has been traditionally linked to the capacity of firms to generate profits from these innovations. These profits, in turn, are used by firms to finance their investments in techno...

This article estimates price-cost margins for the Portuguese markets in a context of imperfect competition in the labour market. The database used includes virtually the universe of Portuguese fi rms for the period 2005-2009. The results strongly reject the hypothesis of perfect competition in both labour and product markets. Estimated price-cost margins are very heterogeneous across markets an...

This paper presents a model of a global CO 2 emissions market as envisaged in the Kyoto Protocol. Using an agent-based simulation, six trading regions abstracted from the Annex-I countries are allowed to trade within a market defined by 1) perfect competition, 2) monopoly, 3) monopsony, and 4) unrestrained strategic battling between powerful buyers and sellers. Cost analysis was performed for v...

Electricity market liberalization aims to boost competition at the level of each member state as well as within the European Union (EU). Therefore, observing the strategic behavior of the market players (e.g. related to net access, cooperation or refusal to collaborate, etc.) becomes crucial. There are different mathematical models for describing the behaviour of a competitive market. For the s...

In a framework where deregulating the electric power market is an objective to be achieved, this thesis investigates how the transmission rules chosen by the regulator to deregulate this market will shape the incentives given to the market players and influence their market power. To study this influence, it is challenging the perfect market assumptions and examining how physical and financial ...