Trade rules for uncleared markets
We analyze markets in which the price of a traded commodity is such that the supply and the demand are unequal. Under standard assumptions, the agents then have single peaked preferences on their consumption or production choices. For such markets, we propose a class of Uniform Trade rules each of which determines the volume of trade as the median of total demand, total supply, and an exogenous constant. Then these rules allocate this volume 'uniformly' on either side of the market. We evaluate these 'trade rules' on the basis of some standard axioms in the literature. We show that they uniquely satisfy Pareto optimality, strategy proofness, no-envy, and an informational simplicity axiom that we introduce. We also analyze the implications of anonymity, renegotiation proofness, and voluntary trade on this domain.
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.:
- Salvador Barbera & Matthew O. Jackson, 1993.
1021, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- H. Moulin, 1980. "On strategy-proofness and single peakedness," Public Choice, Springer, vol. 35(4), pages 437-455, January.
- Bettina Klaus & Hans Peters & Ton Storcken, 1997.
"Reallocation of an infinitely divisible good,"
Springer, vol. 10(2), pages 305-333.
- Ching, Stephen, 1992. "A simple characterization of the uniform rule," Economics Letters, Elsevier, vol. 40(1), pages 57-60, September.
- Thomson, W., 1991. "Resource-Monotonic Solutions to the Problem of Fair Divosion when Preferences are Single-Peaked ," RCER Working Papers 301, University of Rochester - Center for Economic Research (RCER).
- Bettina Klaus & Hans Peters & Ton Storcken, 1998. "Strategy-proof division with single-peaked preferences and individual endowments," Social Choice and Welfare, Springer, vol. 15(2), pages 297-311.
- Thomson William, 1994. "Consistent Solutions to the Problem of Fair Division When Preferences Are Single-Peaked," Journal of Economic Theory, Elsevier, vol. 63(2), pages 219-245, August.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpmi:0508002. 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: (EconWPA)
If references are entirely missing, you can add them using this form.