How do different market institutions affect efficiency

Reference no: EM133408907

Question: How closely can we match/implement the classical assumptions in practice? Do some deviations from classical assumptions constitute negligible frictions or do they seriously challenge the predictive power of competitive equilibrium pricing?

• Are there "real" market institutions for which the competitive equilibrium is a good predictor of price and quantity outcomes?

• How do different market institutions affect efficiency and convergence to the competitive equilibrium?

• Do competitive markets disseminate and aggregate information sufficiently so that all traders with limited private information act as if they new all information available in the market?

Reference no: EM133408907

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