Bargaining with Asymmetric Information in Non-Stationary Markets

Posted: 3 Jun 1999

See all articles by Daniel Trefler

Daniel Trefler

University of Toronto - Rotman School of Management; National Bureau of Economic Research (NBER)

Abstract

The Rubinstein and Wolinsky bargaining-in-markets framework is modified by the introduction of asymmetric information and non-stationarity. Non-stationarity is introduced in the form of an arbitrary stochastic Markov process which captures the dynamics of market entry and pairwise matching. A new technique is used for establishing existence and characterizing the unique outcome of a non-stationary market equilibrium. The impact of market supply and demand on bilateral bargaining outcomes and matching probabilities is explored. The results are useful for examining such questions as why coordination failures and macroeconomic output fluctuations are correlated with real and monetary shocks.

JEL Classification: C72, C78, E20

Suggested Citation

Trefler, Daniel, Bargaining with Asymmetric Information in Non-Stationary Markets. Available at SSRN: https://ssrn.com/abstract=161373

Daniel Trefler (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-978-4190 (Phone)
416-978-6713 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
508
PlumX Metrics