HIERARCHICAL TRADE.
Commodity trading is typically organized hierarchically: Large‐scale trade takes place at the global price system while individuals trade at local price systems within their countries. Agencies or trading houses establish the link between these different market places. In this paper, we devise a fra...
| Published in: | Economic Inquiry Vol. 56; no. 2; pp. 1165 - 1185 |
|---|---|
| Main Authors: | , |
| Format: | Article |
| Published: |
Wiley-Blackwell
Apr2018
|
| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=128133082&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 128133082 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Apr2018 vid: 56 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 128133082 10.1111/ecin.12513 ppf: 1165 ppct: 20 formats: fmt: – @attributes: type: T – @attributes: type: P size: 249KB tig: atl: HIERARCHICAL TRADE. aug: au: Gersbach, Hans Haller, Hans affil: Professor, CER‐ETH—Center of Economic Research, at ETH Zurich and CEPR, 8092, Zurich, Switzerland Professor, Department of Economics, Virginia Polytechnic Institute and State University, Blacksburg, VA, 24061‐0316 su: Commerce Resource allocation Domestic markets Retail industry Free trade sug: subj: Commerce Resource allocation Domestic markets Retail industry All other miscellaneous store retailers (except beer and wine-making supplies stores) All other miscellaneous general merchandise stores All Other Miscellaneous Store Retailers (except Tobacco Stores) Free trade ab: Commodity trading is typically organized hierarchically: Large‐scale trade takes place at the global price system while individuals trade at local price systems within their countries. Agencies or trading houses establish the link between these different market places. In this paper, we devise a framework to study this type of hierarchical trade. We identify the free trade and the autarky equilibrium as polar cases. We show that no other two‐stage market equilibria exist if the commodity space is two‐dimensional. An example demonstrates that other, so‐called <italic>intermediate</italic> equilibria exist for three‐dimensional commodity spaces. We then provide an explicit construction of special classes of intermediate equilibria. Moreover, we study the consequences when some countries control the agency that organizes trade at the global level and we analyze the role of international goods arbitrage. Finally, we show that profit‐maximizing agencies may not promote free trade outcomes. (<italic>JEL</italic> D43, D50, F10) pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
|---|