Kugler, Tamar, Neeman, Zvika and Vulkan, Nir (2006) Markets versus Negotiations: An Experimental Investigation. Games and Economic Behaviour, 56 (1). pp. 121-134.
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.
|Keywords:||Centralized markets; Decentralized markets; Decentralized bargaining; Market design; Market formation|
|Centre:||CABDyN Complexity Centre
Faculty of Finance
|Date Deposited:||21 Feb 2012 20:50|
|Last Modified:||23 Oct 2015 14:07|
Actions (login required)