Trading Favors

Trading favors: optimal exchange and forgiveness

House Allocation with Overlapping Agents: A Dynamic Mechanism Design Approach

Many real-life applications of house allocation problems are dynamic. For example, in the case of on-campus housing for college students, each year freshmen apply to move in and graduating seniors leave. Each student stays on campus for a few years only. A student is a “newcomer” in the beginning and then becomes an “existing tenant.” Motivated by this observation, we introduce a model of house...

Selling favors in the lab: experiments on campaign finance reform

Campaign advertising can provide benefits to constituencies when used to fund the distribution of useful information, but voters can be harmed if candidates finance such advertising by trading policy favors to special interests in exchange for contributions. We report data from novel laboratory campaign finance experiments that shed light on this tradeoff, and that provide rigorous empirical ev...

Decentralized Price Adjustment in 2× 2 Replica Economies

This paper presents a model of price adjustment in replica economies with two consumer types and two goods. The model provides a trading rule that allows out-of-equilibrium trading and a decentralized price adjustment rule that features “learning through noisy imitation.” It is shown that for all sufficiently large economies, the process of experimentation and imitation favors adjustment of pri...

Ranking the Trading Symbols of the Largest Companies Listed in the Tehran Stock Exchange Based on the Probability of Informed Trade Criteria

I n this paper, trading symbols of the 30 largest companies listed in the Tehran Stock Exchange (TSE) were ranked based on the asymmetry information risk. Using the Ersan and Alici (2016) modified clustering algorithm (EA), we estimated the probability of informed trading (PIN) to measure the asymmetry information among traders for each trading symbol and trading day through two-year...