Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5073016 | Games and Economic Behavior | 2006 | 14 Pages |
Abstract
We consider the consequences of competition between two types of experimental exchange mechanisms, a “decentralized bargaining” market, and a “centralized” market. It is shown that decentralized bargaining is subject to a process of “unraveling” in which relatively high value traders (buyers with a high willingness to pay and sellers with low costs) continuously find trading in the centralized markets more attractive until few opportunities for mutually beneficial trade remain outside the centralized marketplace.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Tamar Kugler, Zvika Neeman, Nir Vulkan,