[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/a/aea/aejmic/v14y2022i4p200-217.html
   My bibliography  Save this article

Communication and Cooperation in Markets

Author

Listed:
  • S. Nageeb Ali
  • David A. Miller
Abstract
Many markets rely on traders truthfully communicating who has cheated in the past and ostracizing those traders from future trade. This paper investigates when truthful communication is incentive compatible. We find that if each side has a myopic incentive to deviate, then communication incentives are satisfied only when the volume of trade is low. By contrast, if only one side has a myopic incentive to deviate, then communication incentives do not constrain the volume of supportable trade. Accordingly, there are strong gains from structuring trade so that one side either moves first or has its cooperation guaranteed by external enforcement.

Suggested Citation

  • S. Nageeb Ali & David A. Miller, 2022. "Communication and Cooperation in Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 14(4), pages 200-217, November.
    • Handle: RePEc:aea:aejmic:v:14:y:2022:i:4:p:200-217
    DOI: 10.1257/mic.20200296
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/mic.20200296
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/mic.20200296.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/mic.20200296?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejmic:v:14:y:2022:i:4:p:200-217. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.