Gavazza, Alessandro (2012) An empirical equilibrium model of a decentralized asset market. Working papers series, Social Sciences Research Network.
Abstract
I estimate a search-and-bargaining model of a decentralized market to quantify the effects of trading frictions on asset allocations and asset prices, and to quantify the effects of intermediaries that facilitate trade. Using business-aircraft data, I find that, relative to the Walrasian benchmark, 20.3 percent of the assets are misallocated, and prices are 6.61-percent lower. Dealers play an important role in reducing frictions: In a market with no dealers, 32.3 percent of the assets would be misallocated, and prices would decrease by 5.25 percent.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://www.ssrn.com/en/ |
| Additional Information: | © 2012 The Author |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
| Sets: | Departments > Economics |
| Date Deposited: | 18 Feb 2014 16:39 |
| URL: | http://eprints.lse.ac.uk/55727/ |
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