Tornar a Working Papers

Paper #1877

Centralized vs decentralized markets: The role of connectivity
Simone Alfarano, Albert Banal-EstaƱol, Eva Camacho, Giulia Iori, Burcu Kapar i Rohit Rahi
Gener 2024
We consider a setting in which privately informed agents are located in a network and trade a risky asset with other agents with whom they are directly connected. We compare the performance, both theoretically and experimentally, of a complete network (centralized market) to incomplete networks with differing levels of connectivity (decentralized markets). We show that decentralized markets can deliver higher informational efficiency, with prices closer to fundamentals, as well as higher welfare for mean-variance investors.
Paraules clau:
Networks, heuristic learning, informational efficiency, experimental asset markets
Codis JEL:
C92, D82, G14
Àrea de Recerca:
Economia de l'Empresa i Organització Industrial

Descarregar el paper en format PDF