Universität zu Köln

Alos-Ferrer, Carlos ORCID: 0000-0002-1668-9784 and Buckenmaier, Johannes ORCID: 0000-0002-2070-6647 (2017). Trader matching and the selection of market institutions. J. Math. Econ., 69. S. 118 - 128. LAUSANNE: ELSEVIER SCIENCE SA. ISSN 0304-4068

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Abstract

We analyze a stochastic dynamic learning model with boundedly rational traders who can choose among trading institutions with different matching characteristics. The framework allows for institutions featuring multiple prices (per good), thus violating the law of one price. We find that centralized institutions are stochastically stable for a broad class of dynamics and behavioral rules, independently of which other institutions are available. However, some decentralized institutions featuring multiple prices can also survive in the long run, depending on specific characteristics of the underlying learning dynamics such as fast transitions or optimistic behavior. (C) 2017 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Alos-Ferrer, Carlos UNSPECIFIED orcid.org/0000-0002-1668-9784 UNSPECIFIED Buckenmaier, Johannes UNSPECIFIED orcid.org/0000-0002-2070-6647 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-237563
DOI:	10.1016/j.jmateco.2017.02.001
Journal or Publication Title:	J. Math. Econ.
Volume:	69
Page Range:	S. 118 - 128
Date:	2017
Publisher:	ELSEVIER SCIENCE SA
Place of Publication:	LAUSANNE
ISSN:	0304-4068
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language STOCHASTIC STABILITY; INFORMATION; EVOLUTION; DYNAMICS Multiple languages Economics; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/23756