Market Prices Unstable Due to Strategic Trade, Impacting Global Economies
Market prices can fluctuate naturally due to strategic trading, even without external factors. A theory was developed using a duopoly market game with infinite strategies, where equilibrium prices are hard to determine precisely. Despite being informationally efficient, the market still faces instabilities due to approximations made in the model. By using a modified regularization method, pseudo-solutions can be found. This study sheds light on the challenges of predicting market behavior accurately and the limitations of common beliefs among players.