Template-Type: ReDIF-Paper 1.0
Title: Bargaining and delay in Thin Markets
Author-Name: Francesc Dilmé
Author-Email: fdilme@uni-bonn.de

Classification-JEL: C73, C78, D53, G12
Keywords: Thin markets, Decentralized bargaining, Trade delay

Abstract: This paper presents a model of a decentralized thin market with endogenous and stochastic arrival of traders. We obtain that trade delay and price dispersion persist even when
sellers and buyers are homogeneous and bargaining frictions are small. We characterize the
time-dependent transaction prices as a function of the dynamics of the number of traders
in the market, and provide some comparative statics results. Our analysis illustrates the
necessity to properly incorporating the submarket structure into the study of job and housing markets, where the trade opportunities are typically constrained both by each trader’s
geographical location and individual characteristics.

Note: 
Length: 41
Creation-Date: 2019-10
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp133
Handle: RePEc:bon:boncrc:CRCTR224_2019_133