Prices, Delay, and the Dynamics of Trade
We characterize the dynamics of trading patterns and market composition when trade is bilateral, finding a trading partner is costly, prices are determined by bargaining, and preferences are private information. We show that equilibrium is inefficient and exhibits delay as sellers price discriminate between buyers with different values. As frictions vanish, transaction prices are asymptotically competitive and the welfare loss of inefficient trading approaches zero, even though the trading patterns continue to be inefficient and delay persists.
Volume (Year): 28 (2001)
Issue (Month): 7 ()
|Contact details of provider:|| |
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.:
- Douglas Gale, 2010.
"Limit theorems for markets with sequential bargaining,"
Levine's Working Paper Archive
621, David K. Levine.
- Gale, Douglas, 1987. "Limit theorems for markets with sequential bargaining," Journal of Economic Theory, Elsevier, vol. 43(1), pages 20-54, October.
- Peters, Michael, 1991. "Ex Ante Price Offers in Matching Games Non-steady States," Econometrica, Econometric Society, vol. 59(5), pages 1425-54, September.
- Rubinstein, Ariel & Wolinsky, Asher, 1985.
"Equilibrium in a Market with Sequential Bargaining,"
Econometric Society, vol. 53(5), pages 1133-50, September.
- Arial Rubinstein & Asher Wolinsky, 1985. "Equilibrium in a Market with Sequential Bargaining," Levine's Working Paper Archive 623, David K. Levine.
- Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-59, September.
- Oliver D. Hart & Jean Tirole, 1987.
"Contract Renegotiation and Coasian Dynamics,"
442, Massachusetts Institute of Technology (MIT), Department of Economics.
- Serrano, Roberto & Yosha, Oved, 1996.
"Welfare Analysis of a Market with Pairwise Meetings and Asymmetric Information,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 167-75, June.
- Oved Yosha & Roberto Serrano, 1996. "Welfare analysis of a market with pairwise meetings and asymmetric information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(1), pages 167-175.
- Wolinsky, Asher, 1987.
"Information Revelation in a Market with Pairwise Meetings,"
The Warwick Economics Research Paper Series (TWERPS)
284, University of Warwick, Department of Economics.
- Wolinsky, Asher, 1990. "Information Revelation in a Market with Pairwise Meetings," Econometrica, Econometric Society, vol. 58(1), pages 1-23, January.
- Matthew O. Jackson & Thomas R. Palfrey, 1998.
"Efficiency and Voluntary Implementation in Markets with Repeated Pairwise Bargaining,"
Econometric Society, vol. 66(6), pages 1353-1388, November.
- Matthew O. Jackson & Thomas R. Palfrey, 1997. "Efficiency and Voluntary Implementation in Markets with Repeated Pairwise Bargaining," Game Theory and Information 9711003, EconWPA.
- Sattinger, Michael, 1995. "Search and the Efficient Assignment of Workers to Jobs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 283-302, May.
- John Wooders & Diego Moreno, 2001.
"Prices, Delay, and the Dynamics of Trade,"
AccessEcon, vol. 28(7), pages A0.
- K. G. Binmore & M. J. Herrero, 1988. "Matching and Bargaining in Dynamic Markets," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 17-31.
- Larry Samuelson, 1992. "Disagreement in Markets with Matching and Bargaining," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 177-185.
When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-01aa0010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.