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Fairness, Price Stickiness, and History Dependence in Decentralized Trade

Title data

Napel, Stefan ; Korth, Christian:
Fairness, Price Stickiness, and History Dependence in Decentralized Trade.
In: Journal of Economic Behavior & Organization. Vol. 71 (2009) Issue 2 . - pp. 502-514.
ISSN 0167-2681
DOI: https://doi.org/10.1016/j.jebo.2009.03.010

Abstract in another language

The paper investigates price formation in a decentralized market with random matching. Agents are assumed to have subdued social preferences: buyers, for example, prefer a lower price to a higher one but experience reduced utility increases below a reference price which serves as a common fairness benchmark. The strategic equilibrium reflects market fundamentals, but it is markedly less sensitive to the buyer-seller ratio near the fair price benchmark. Prices may be sticky around very different reference levels in markets with otherwise identical fundamentals. The implied history dependence turns out to be mitigated rather than exacerbated by friction.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: random matching; price stickiness; social preferences; history dependence;
reference dependence;
Subject classification: C78; D49; D63; C91
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics IV
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics IV > Chair Economics IV - Univ.-Prof. Dr. Stefan Napel
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences
300 Social sciences > 320 Political science
300 Social sciences > 330 Economics
Date Deposited: 12 Feb 2016 10:15
Last Modified: 03 May 2017 08:12
URI: https://eref.uni-bayreuth.de/id/eprint/30230