search query: @indexterm rationing / total: 39
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Author: | Peek, J. |
Title: | Demand uncertainty, incomplete markets, and the optimality of rationing |
Journal: | Journal of Economic Theory
1996 : AUG, VOL. 70:2, p 342-363 |
Index terms: | RATIONING UNCERTAINTY PARETO LAW |
Language: | eng |
Abstract: | When the arrival of traders at the market is stochastic, and it is impossible for the traders who might arrive to meet ex ante, then Walrasian spot-market clearing presents consumers with price-risk and is typically not Pareto optimal. Instead, with an indivisible good and a divisible numeraire, the first-best can be achieved by an "Exchange" selling raffle tickets at a fixed price. When only spot market trading is feasible and consumers cannot commit to pay unless they purchase the indivisible good, efficiency implies price-fixing with rationing. Potential disadvantages of black markets and scalping are discussed. |
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