Meeting Technologies in Decentralized Asset Markets

Robert Shimer, Gregor Jarosch and Maryam Farboodi
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Gregor Jarosch: Stanford University
Maryam Farboodi: Princeton University

No 844, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We study decentralized trading networks where agents differ in both their time-varying taste for an asset and the constant frequency at which they meet others. We show that fast agents can endogenously arise as intermediators whose net valuation of an asset gets moderated through their exposure to others. We show that allocating meetings in an ex-ante asymmetric fashion across agents generates higher welfare then a homogeneous distribution of meeting frequencies, only if some agents intermediate. We also characterize properties of the market equilibrium in which ex-ante identical agents choose their meeting rates, and compare the allocation with the planner allocation.

Date: 2016
New Economics Papers: this item is included in nep-mst
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