Year 2017, Volume 5 , Issue 1, Pages 18 - 33 2017-07-14

TRADE RULES FOR UNCLEARED MARKETS WITH A VARIBLE POPULATION
TRADE RULES FOR UNCLEARED MARKETS WITH A VARIBLE POPULATION

İpek GÜRSEL TAPKI [1]


We analyze markets in open economies in which the price of a traded commodity is fixed and as a result of this stickiness, the demand and the supply are possibly unequal. In our model, the agents have single peaked preferences on their consumption and production choices. For such markets, we analyze the implications of population changes as formalized by the well-known “consistency” property. We first characterize the subclass of “Uniform trade rules” that satisfies Pareto optimality, no-envy, and consistency. Next, we add an informational simplicity property which is called “independence of trade volume” and we show that among the “Uniform trade rules” that satisfy Pareto optimality, no-envy, and consistency, only the one that clear either the short or long side of the market satisfies independence of trade volume.

 We analyze markets in open economies in which the price of a traded commodity is fixed and as a result of this stickiness, the demand and the supply are possibly unequal. In our model, the agents have single peaked preferences on their consumption and production choices. For such markets, we analyze the implications of population changes as formalized by the well-known “consistency” property. We first characterize the subclass of “Uniform trade rules” that satisfies Pareto optimality, no-envy, and consistency. Next, we add an informational simplicity property which is called “independence of trade volume” and we show that among the “Uniform trade rules” that satisfy Pareto optimality, no-envy, and consistency, only the one that clear either the short or long side of the market satisfies independence of trade volume.

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Subjects Social
Journal Section ARTICLES
Authors

Author: İpek GÜRSEL TAPKI
Institution: KADİR HAS ÜNİVERSİTESİ
Country: Turkey


Dates

Application Date : March 31, 2017
Acceptance Date : June 21, 2017
Publication Date : July 14, 2017

APA Gürsel Tapkı, İ . (2017). TRADE RULES FOR UNCLEARED MARKETS WITH A VARIBLE POPULATION . International Review of Economics and Management , 5 (1) , 18-33 . DOI: 10.18825/iremjournal.303155