Efficiency in Decentralized Markets with Aggregate Uncertainty

Lucas Maestri, Dino Gerardi and Braz Camargo ()

No 103, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We study efficiency in decentralized markets with aggregate uncertainty and one-sided private information. There is a continuum of mass one of uninformed buyers and a continuum of mass one of informed sellers. Buyers and sellers are randomly and anonymously matched in pairs over time, and buyers make the offers. We show that all equilibria become efficient as trading frictions vanish.

Date: 2016
New Economics Papers: this item is included in nep-dge, nep-exp and nep-mic
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Related works:
Journal Article: Efficiency in Decentralised Markets with Aggregate Uncertainty (2020)
Working Paper: Efficiency in Decentralized Markets with Aggregate Uncertainty (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:103

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