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Uniform trade rules for uncleared markets

Kıbrıs, Özgür and Küçükşenel, Serkan (2008) Uniform trade rules for uncleared markets. (Accepted/In Press)

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Official URL: http://www.springerlink.com/content/100385/

Abstract

We analyze markets in which the price of a traded commodity is such that the supply and the demand are unequal. Under standard assumptions, the agents then have single peaked preferences on their consumption or production choices. For such markets, we propose a class of Uniform Trade rules each of which determines the volume of trade as the median of total demand, total supply, and an exogenous constant. Then these rules allocate this volume “uniformly” on either side of the market. We evaluate these “trade rules” on the basis of some standard axioms in the literature. We show that they uniquely satisfy Pareto optimality, strategy proofness, no-envy, and an informational simplicity axiom that we introduce. We also analyze the implications of anonymity, renegotiation proofness, and voluntary trade on this domain.

Item Type:Article
Uncontrolled Keywords:Market disequilibrium; trade rule; eciency; strategy proofness; anonymity; no-envy; renegotiation proofness; voluntary trade.
Subjects:H Social Sciences > HB Economic Theory
ID Code:8888
Deposited By:Özgür Kıbrıs
Deposited On:19 Sep 2008 17:02
Last Modified:01 Jun 2009 15:57

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