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Prices, delay and the dynamics of trade

John Wooders () and Diego Moreno

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: We characterize trading patterns and their dynamics in a market in which trade is bilateral, finding a trading partner is costly, prices are determined by bargaining, and preferences are private information. We also determine how the trading pattern depends on the market composition. Our analysis reveals that market equilibria may be inefficient and may exhibit delay. As the market becomes frictionless the welfare loss due to inefficiency vanishes; delay persists, however, and in this respect frictionless markets are not competitive.

Keywords: Trade; dynamics; Matching; Bargaining; Delay; Asymmetric; information; Decentralized; trade (search for similar items in EconPapers)
Date: 1999-05
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Related works:
Journal Article: Prices, Delay, and the Dynamics of Trade (2002) Downloads
Journal Article: Prices, Delay, and the Dynamics of Trade (2001) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:7217

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