Market Inefficiency, Entry Order and Coordination

Abstract The causes of market inefficiency are many. We suggest an additional cause — buyers’ random entry order. In a where identical sellers compete for buyers heterogeneous valuations, first come served is the norm. Since all choose cheapest available good, low-valuation buyer who enters late may find remaining goods unaffordable, which markets not to clear. therefore propose coordination solution problem. that in high-valuation enter and afterwards, clears effectively. Moreover, we arising from order becomes less problem larger economies vanishes limit.