COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1037

"Some Dynamics of a Strategic Market Game
with a Large Number of Agents"

John H. Miller and Martin Shubik

November 1992

This paper is designed to combine the game theoretic investigation of the static or equilibrium properties of large strategic market games together with the investigation of some very simple dynamics, which nevertheless are sufficient to show differences between two related games, one in which both borrowing and trade take place. The role of banking reserves emerges as relevant and sensitive to the transient state dynamics.

Several 100,000 player games are simulated and the behavior is constructed with the analytical prediction for the games with a continuum of agents.