Search and bargaining in large markets with homogeneous traders

Clara Ponsati

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: We study pair-wise decentralized trade in dynamic markets with homogeneous, non-atomic, buyers and sellers that wish to exchange one unit. Pairs of traders are randomly matched and bargaining a price under rules that offer the freedom to quit the match at any time. Market equilbria, prices and trades over time, are characterized. The asymptotic behavior of prices and trades as frictions (search costs and impatience) vanish, and the conditions for (non) convergence to walrasian prices are explored. As a side product of independent interest, we present a self-contained theory of non-cooperative bargaining with two-sided, time-varying, outside options.

Keywords: Bargaining; Market Equilibrium; Outside Options (search for similar items in EconPapers)
JEL-codes: C7 D4 D5 (search for similar items in EconPapers)
Pages: 23
Date: 2001-09-01
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Search and Bargaining in Large Markets With Homogeneous Traders (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:533.02

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