arXiv q-fin· Muqiao Huang, Ruodu Wang, Yiyun Wang·· 5 hr agoAI Score31
Equilibrium in a Closed, Fee-Free Constant Function Market Maker Economy
Equilibrium in closed constant-function market maker economies
AI summary
This paper focuses on the equilibrium problem of a closed, fee-free constant function market maker (CFMM) economy with two assets and two trading agents. It clarifies the conditions under which one-sided no-trade equilibria hold, derives the existence conditions for a representative agent, and verifies the reachability of feasible states and the convergence of alternating utility-maximizing trades. The research belongs to the field of trading and market microstructure, with the paper version arXiv:2608.23915v2.
Source:arXiv q-fin · arxiv.org