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Uniform trade rules for uncleared markets

Kıbrıs, Özgür and Küçükşenel, Serkan (2009) Uniform trade rules for uncleared markets. Social Choice and Welfare, 32 (1). pp. 101-121. ISSN 0176-1714. doi:10.1007/s00355-008-0312-1.

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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.

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Additional Information:© 2008 Springer. Received: 29 June 2006 / Accepted: 3 April 2008 / Published online: 16 May 2008. We gratefully acknowledge Ipek Gürsel Tapkı for a very useful observation. We also thank William Thomson, Tayfun Sönmez, Utku Ünver, and Anirban Kar as well as the seminar participants at Sabancı University, Koç University, ASSET 2004, SED 2004, and the Murat Sertel Memorial Conference on Economic Theory for their comments and suggestions on an earlier version of this paper. The first author gratefully acknowledges the research support of the Turkish Academy of Sciences via a TUBA-GEBIP fellowship.
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Turkish Academy of SciencesUNSPECIFIED
Subject Keywords:single-peaked preferences; fair division
Issue or Number:1
Record Number:CaltechAUTHORS:KIBscw09
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:13599
Deposited By: Tony Diaz
Deposited On:11 May 2009 18:31
Last Modified:08 Nov 2021 22:39

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