Inefficient Delays in Strategic Trades

Kim-Sau Chung

Research in Economics from Santa Fe Institute

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.

Keywords: delays; inefficient delays; strategic delays (search for similar items in EconPapers)
Date: 1997-06
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