In this thesis, we study how the efficiency of competitive equilibrium in a pure exchange economy with hidden action depends on the market structure. We consider both competitive anonymous markets, where consumers make their choices taking as given some relevant economic parameters, and competitive strategic markets, where consumers interact with financial intermediaries who explicitly take into account the choices of other economic agents. In the first chapter, we review some known results on the efficiency of competitive equilibrium under different market structures. In the second chapter, we assume that there are multiple consumption goods and that the level of action affects the marginal benefit consumers get from consumption. We consider two different market structures: a complete set of contingent-commodity markets, and a complete set of financial markets, together with spot markets for consumption goods. The main result we provide in this chapter is that under more general hypothesis than those usually considered in the literature, the equilibrium with financial markets is not efficient. In the third chapter, we assume that consumers can insure themselves by voluntarily committing to deliver part of their endowment to a common pool in exchange for a sure return from the pool itself. We show that an equilibrium with pool of promises exists, and we characterize it.

In this thesis, we study how the efficiency of competitive equilibrium in a pure exchange economy with hidden action depends on the market structure. We consider both competitive anonymous markets, where consumers make their choices taking as given some relevant economic parameters, and competitive strategic markets, where consumers interact with financial intermediaries who explicitly take into account the choices of other economic agents. In the first chapter, we review some known results on the efficiency of competitive equilibrium under different market structures. In the second chapter, we assume that there are multiple consumption goods and that the level of action affects the marginal benefit consumers get from consumption. We consider two different market structures: a complete set of contingent-commodity markets, and a complete set of financial markets, together with spot markets for consumption goods. The main result we provide in this chapter is that under more general hypothesis than those usually considered in the literature, the equilibrium with financial markets is not efficient. In the third chapter, we assume that consumers can insure themselves by voluntarily committing to deliver part of their endowment to a common pool in exchange for a sure return from the pool itself. We show that an equilibrium with pool of promises exists, and we characterize it.

Markets have an important role to play in advancing an improved understanding of international trading relationships. Two most important economic issues, which contribute to improved national welfare and ensure long-run competitive market equilibrium in international markets, are market integration and market efficiency. To provide softwood lumber markets related information to the policy makers, economic analyses relating market integration and market efficiency of the combined markets of Canada and the US have been conducted. The economic analyses include: (i) testing cointegration of prices among North American softwood lumber markets; (ii) identifying price leading markets in long-run price structure of these cointegrated markets; (iii) examining the degree of market integration among these markets; and (iv) testing the efficiency of spatial arbitrage among these markets. First, the price linkages in the North American softwood lumber markets have been explored over different trade regimes. The results indicate that market integration is affected by product aggregation of data. Further investigations of market integration are, therefore, limited to homogeneous softwood lumber product markets. Second, oligopsonistic pricing behavior of traders is identified as the possible reason for imperfect competition among Douglas Fir product markets, while imperfect competition among the markets of Spruce-Pine-Fir and Hem Fir products can not be explained by this behavior. Third, a comprehensive picture of the adherence to price parity is formulated by evaluating the magnitude and persistence of deviations from equilibrium relation of prices. It is found that large volumes of trade, product substitutability, lower prices, and certainty of trade are the factors which contribute to higher degree of market integration among North American softwood lumber product markets. Finally, the inter-temporal shifts in regime probabilities of competitive market equilibrium are assessed over different trade regimes. It is found that lower transaction costs, large volumes of trade, short distances between markets, and certainty of trade contribute to high market efficiency among softwood lumber product markets of North America.

Markets have an important role to play in advancing an improved understanding of international trading relationships. Two most important economic issues, which contribute to improved national welfare and ensure long-run competitive market equilibrium in international markets, are market integration and market efficiency. To provide softwood lumber markets related information to the policy makers, economic analyses relating market integration and market efficiency of the combined markets of Canada and the US have been conducted. The economic analyses include: (i) testing cointegration of prices among North American softwood lumber markets; (ii) identifying price leading markets in long-run price structure of these cointegrated markets; (iii) examining the degree of market integration among these markets; and (iv) testing the efficiency of spatial arbitrage among these markets. First, the price linkages in the North American softwood lumber markets have been explored over different trade regimes. The results indicate that market integration is affected by product aggregation of data. Further investigations of market integration are, therefore, limited to homogeneous softwood lumber product markets. Second, oligopsonistic pricing behavior of traders is identified as the possible reason for imperfect competition among Douglas Fir product markets, while imperfect competition among the markets of Spruce-Pine-Fir and Hem Fir products can not be explained by this behavior. Third, a comprehensive picture of the adherence to price parity is formulated by evaluating the magnitude and persistence of deviations from equilibrium relation of prices. It is found that large volumes of trade, product substitutability, lower prices, and certainty of trade are the factors which contribute to higher degree of market integration among North American softwood lumber product markets. Finally, the inter-temporal shifts in regime probabilities of competitive market equilibrium are assessed over different trade regimes. It is found that lower transaction costs, large volumes of trade, short distances between markets, and certainty of trade contribute to high market efficiency among softwood lumber product markets of North America.