Division of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 No Trade
نویسندگان
چکیده
We investigate, in a simple bilateral bargaining environment, the extent to which asymmetric information can induce individuals to engage in exchange where trade is not mutually profitable. We first establish a no-trade theorem for this environment. A laboratory experiment is conducted, where trade is found to occur between 16% and 32% of the time, depending on the specific details of the environment and trading mechanism. In most cases, buyers gain from such exchange, at the expense of sellers. An equilibrium model with näıve, or ”cursed,” beliefs accounts for some of the behavior findings, but open questions remain. JEL classification: O24, O26.
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Peter Sokol-Hessner, Colin F. Camerer, and Elizabeth A. Phelps Division of the Humanities and Social Sciences (HSS), California Institute of Technology, Division of the Humanities and Social Sciences (HSS) and Computational and Neural Systems (CNS), California Institute of Technology, 1200 E. California Blvd., Pasadena, CA 91125, USA, and Department of Psychology, New York University, 6 Washing...
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