Bargaining with Arrival of New Traders | Zendy

William Fuchs | Zendy; Andrzej Skrzypacz | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Bargaining with Arrival of New Traders

Author(s) -

William Fuchs,

Andrzej Skrzypacz

Publication year - 2010

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.100.3.802

Subject(s) - economics , microeconomics , arrival time , function (biology) , stochastic game , limit (mathematics) , econometrics , mathematical economics , mathematics , mathematical analysis , evolutionary biology , transport engineering , engineering , biology

We study dynamic bargaining with asymmetric information and arrival of exogenous events, which represent arrival of traders or information. We characterize the unique limit of stationary equilibria with frequent offers. The possibility of arrivals changes equilibrium dynamics. There is delay in equilibrium, and the seller slowly screens out buyers with higher valuations. The seller payoff equals what he can achieve by simply awaiting an arrival. In applications, when buyer valuations fall, average prices drop and delay increases. Surplus division depends on relative arrival rates of buyers/sellers and expected time to trade is a nonmonotonic function of the arrival rate. (JEL C78, D82)

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research