A Decentralized Market for a Perishable Good
We characterize the steady state of a market with random matching and bargaining, where the sellers' goods can perish overnight. Generically, the quantity traded is suboptimal, prices are dispersed and there is a dead-weight loss caused by excess supply or demand. In the limit as the cost of staying in the market tends to zero, only the amount of trade tends to the efficient level, the other two non-competitive characteristics remain. We discuss the implications of these findings on the foundations of competitive equilibrium and on the robustness of the results in the literature on durable-good markets.
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Volume (Year): 7 (2007)
Issue (Month): 1 (February)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gale, Douglas & Sabourian, Hamid, 2006.
"Markov equilibria in dynamic matching and bargaining games,"
Games and Economic Behavior,
Elsevier, vol. 54(2), pages 336-352, February.
- Gale, D. & Sabourian, H., 2002. "Markov Equilibria of Dynamic Matching and Bargaining Games," Working Papers 02-07, C.V. Starr Center for Applied Economics, New York University.
- Gale, D. & Sabourian, H., 2003. "Markov Equilibria in Dynamic Matching and Bargaining Games," Cambridge Working Papers in Economics 0322, Faculty of Economics, University of Cambridge.
- Clara Ponsati & Jozsef Sakovics, 2005. "Markets for professional services: queues and mediocrity," ESE Discussion Papers 133, Edinburgh School of Economics, University of Edinburgh.
- Dale T. Mortensen & Randall Wright, 2002. "Competitive Pricing and Efficiency in Search Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 1-20, February.
- Arthur J. Hosios, 1990. "On The Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 279-298.
- Gale,Douglas, 2000. "Strategic Foundations of General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521643306, Diciembre.
- Gale,Douglas, 2000. "Strategic Foundations of General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521644105, Diciembre.
- Gale, Douglas, 1987. "Limit theorems for markets with sequential bargaining," Journal of Economic Theory, Elsevier, vol. 43(1), pages 20-54, October.
- Douglas Gale, 2010. "Limit theorems for markets with sequential bargaining," Levine's Working Paper Archive 621, David K. Levine.
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