Price Discovery and Market Information in the Transition Economy of Russia: A Laboratory Study

Menkhaus Dale J. () and Yakunina Alla ()

EERC Working Paper Series from EERC Research Network, Russia and CIS

Abstract: Using laboratory experiments we study how the levels of prices, quantities traded, and earnings are affected in decentralized as compared with centralized trading in the case of spot delivery; and if market price reports can improve efficiency in decentralized trading. Results indicate that sellers are in a weaker bargaining position than buyers in decentralized spot trading, due to advance production and the associated risk of inventory loss. Additionally provided price information does not improve the bargaining position of sellers and, in some cases, can worsen market efficiency as well as the distribution of earnings between sellers and buyers.

Keywords: Russia; information; private negotiation; experiments (search for similar items in EconPapers)
JEL-codes: C78 C90 D80 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2002-04-18
New Economics Papers: this item is included in nep-fin and nep-rmg
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