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Inefficient Delays in Strategic Trades

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  • Kim-Sau Chung

Abstract

Inefficient delays in trades can sometimes be observed after the arrival of important public news. This paper explains these phenomena with a model in which agents defer trades in the fear that they may be taken advantaged of by better informed trading partners. Under certain conditions, delay is inevitable, yet total collapse of trade can be avoided.

Suggested Citation

  • Kim-Sau Chung, 1997. "Inefficient Delays in Strategic Trades," Research in Economics 97-06-057e, Santa Fe Institute.
    • Handle: RePEc:wop:safire:97-06-057e
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    File URL: http://www.santafe.edu/sfi/publications/Working-Papers/97-06-057.ps
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