Markets versus Negotiations: The Predominance of Centralized Markets
2010 ◽
Vol 10
(1)
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Keyword(s):
The paper considers the consequences of competition between two widely used exchange mechanisms, a decentralized bargaining'' market, and a centralized'' market. In every period, members of a large heterogenous group of privately-informed traders who each wish to buy or sell one unit of some homogenous good may opt for trading through one exchange mechanism. Traders may also postpone their trade to a future period. It is shown that trade outside the centralized market completely unravels. In every strong Nash equilibrium, all trade takes place in the centralized market. No trade ever occurs through direct negotiations.
2019 ◽
Vol 305
(S1)
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pp. S140-S149
2017 ◽
Vol 68
◽
pp. 1-12
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2005 ◽
Vol 24
◽
pp. 357-406
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2014 ◽
Vol 87
◽
pp. 269-287
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2019 ◽
Vol 30
(03)
◽
pp. 355-374
Keyword(s):
2015 ◽
Vol 265
◽
pp. 911-927
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