Bargaining in small dynamic markets

• 成果类型: Article
• 署名作者: Dilme, Francesc
• 署名单位: University of Bonn
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2022.105589
• 发表日期: 2023
• 关键词: Small dynamic markets; Decentralized bargaining; Trade delay

摘要

This paper studies trade in endogenously evolving markets exhibiting few traders at any given point in time. Traders arrive in the market and bargain until they complete a trade. We find that, unlike large markets, small markets feature trade delay and price dispersion, even when sellers and buyers are homogeneous and matching frictions are small. We characterize transaction prices as a function of the endogenous evolution of the market composition and economic conditions, providing several novel comparative statics results. Our analysis highlights the need to incorporate sub-market structures into the theoretical study of job, real estate, and rental markets, where trade opportunities are typically constrained by both the geographical location and individual characteristics of each trader.(c) 2022 The Author(s). Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).JEL classification: C73; C78; D53; G12Keywords: Small dynamic markets; Decentralized bargaining; Trade delay