Bargaining Frictions in Trading Networks
B E JOURNAL OF THEORETICAL ECONOMICS, pp. 1-11, 2018.
In the canonical model of frictionless markets, arbitrage is usually taken to force all trades of homogeneous goods to occur at essentially the same price. In the real world, however, arbitrage possibilities are often severely restricted and this may lead to substantial price heterogeneity. Here we focus on frictions that can be modeled a...More
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