9617793 Zhou Decentralized trading raises three important questions. First, how can mutual gains to trade among a large group of agents be realized when the only direct meetings between agents are in small groups, e.g., pairs? In other words, how can the lack of double coincidence of wants be overcome in a decentralized trading environment? Second, how can uniform terms of trade be established and maintained among these trading coalitions that only communicate indirectly with one another, and can the uniformity be exact or only approximate? Third, are there other non-uniform patterns of trade that could be equilibria, and how do they compare to the uniform terms of trade in efficiency? Kiyotaki and Wright initiated a research program that has made great progress in addressing the first question. Their model makes simplifying assumptions that trivialize the other two questions, though. This project analyzes a generalization of their model that permits all three questions to be addressed in an integrated framework.
