Sequential Moves and Comparative Statics in Strategic Market Games

Strategic market games model strategic exchange economies as noncoop- erative simultaneous moves games. A recent paper by Bloch and Ghosal (J. Econ. Theory, 74 (1997), 368{384.) has shown that strategic market games might exhibit a rather counterintuitive comparative statics property: an in- crease in the number of traders on the own side of the market might increase the equilibrium utility for any trader. We study a strategic market game with sequential moves and show that this finding is not robust to the introduction of sequential moves: an advantage of having competitors does not exist for the first movers in a strategic market game with sequential moves. The intuition from the comparative statics analysis in Cournot oligopolies can be regained if one takes the sequential structure of the Cournot model into consideration