A Decentralized Market for a Perishable Good

Research output: Working paper

Abstract

We characterize the steady state of a market with random matching and bargaining, where the sellers' goods can perish overnight. Generally, the quantity traded is suboptimal, prices are dispersed and their is a dead-weight loss caused by excess supply or demand. In the limit, as the cost of staying in the market tends to zero, only the amount of trade tends to the efficient level, the other two non-competitive characteristics remain. We discuss the implications of these findings on the foundations of competitive equilibrium and on the robustness of the results in the literature of durable-goods markets.
Original languageEnglish
PublisherEdinburgh School of Economics Discussion Paper Series
Number of pages23
Publication statusPublished - 3 Mar 2006

Publication series

NameESE Discussion Papers
No.141

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