Social Choice and Welfare

, Volume 32, Issue 1, pp 101–121

Uniform trade rules for uncleared markets

Original Paper

DOI: 10.1007/s00355-008-0312-1

Cite this article as:
Kıbrıs, Ö. & Küçükşenel, S. Soc Choice Welf (2009) 32: 101. doi:10.1007/s00355-008-0312-1

Abstract

We analyze markets in which the price of a traded commodity is such that the supply and the demand are unequal. Under standard assumptions, the agents then have single peaked preferences on their consumption or production choices. For such markets, we propose a class of Uniform trade rules each of which determines the volume of trade as the median of total demand, total supply, and an exogenous constant. Then these rules allocate this volume “uniformly” on either side of the market. We evaluate these “trade rules” on the basis of some standard axioms in the literature. We show that they uniquely satisfy Pareto optimality, strategy proofness, no-envy, and an informational simplicity axiom that we introduce. We also analyze the implications of anonymity, renegotiation proofness, and voluntary trade on this domain.

Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  1. 1.Faculty of Arts and Social SciencesSabancıUniversityIstanbulTurkey
  2. 2.Division of The Humanities and Social SciencesCalifornia Institute of TechnologyPasadenaUSA