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Income distribution and exchange in a dynamic search model

  • Yilmaz, Ensar
  • Ünveren, Burak
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    This paper studies the link between income distribution and trade mechanisms in a dynamic search model with two-sided asymmetric information. Buyers and sellers have imperfect information about the income levels of the other group. Furthermore, asymmetry of information about incomes is the source of price dispersion. In such a frictional environment, we capture the effects of a change in inter- and intra-class income distribution on the trade mechanism, which is represented by the expected trade volume and the flux of buyers and sellers in the market.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1059056010001334
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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 20 (2011)
    Issue (Month): 4 (October)
    Pages: 665-678

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    Handle: RePEc:eee:reveco:v:20:y:2011:i:4:p:665-678
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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    18. Corominas-Bosch, Margarida, 2004. "Bargaining in a network of buyers and sellers," Journal of Economic Theory, Elsevier, vol. 115(1), pages 35-77, March.
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