BILATERAL TRADING AND THE CURSE OF KNOWLEDGE: AN EXPERIMENTAL ECONOMICS STUDY

This research investigates the impact of reporting different kinds of trade information to buyers and sellers in laboratory markets, for which exchange is made through bilateral bargaining. Results suggest that public information may improve the bargaining position of buyers relative to sellers when there is spot delivery. In some cases sellers earn less than in a no information baseline. There is evidence of a curse of knowledge for sellers in our information experiments when quantity traded for the entire market is known. The mandatory price reporting of all trades does not improve the income of sellers.International Relations/Trade,

Helping Russian Students See the Invisible Hand

Teaching/Communication/Extension/Profession,

Impact of foreign economic sanctions on the Russian market of bonds denominated in foreign currencies

The market of Russian bonds denominated in foreign currencies was considered as the primary target for the initial package of the USA and EU economic sanctions in 2014. The analyses showed that, by the end of 2017, there was a significant reduction in the number of outstanding bond issues denominated in foreign currencies and a sharp increase in the bonds nominal volume evaluated in Russian rubles. The sanctions did not lead to a significant change in the structure of the market either from the standpoint of the number of bond issues denominated in foreign currencies or in terms of their nominal value. However, the number of foreign currencies in which bond issues were denominated was reduced from 11 to 6

Liberalization of Russian gas exports: benefits and challenges

Russian gas export liberalization has been discussed throughout the post-Soviet period. Recently, the number of Gazprom’s export monopoly advocates has been diminishing as a result of dramatic changes in both European and Russian gas markets, which are: increasing international trade in liquefied natural gas; the EU movement from long-term contracts to the commodity markets and hub pricing; substantially increased share of the non-Gazprom gas suppliers at the Russian domestic market. Although there is a potential risk of price decrease in the EU gas market in the case of the Gazprom export monopoly abolition, the benefits of the Russian gas export liberalization would be greater than losses. The gas resource base and the cost of pipeline gas production would allow Russia to improve its positions in the world market

Price Discovery and Market Information in the Transition Economy of Russia: A Laboratory Study

Using laboratory experiments we study how the levels of prices, quantities traded, and earnings are affected in decentralized as compared with centralized trading in the case of spot delivery; and if market price reports can improve efficiency in decentralized trading. Results indicate that sellers are in a weaker bargaining position than buyers in decentralized spot trading, due to advance production and the associated risk of inventory loss. Additionally provided price information does not improve the bargaining position of sellers and, in some cases, can worsen market efficiency as well as the distribution of earnings between sellers and buyers.Russia, information, private negotiation, experiments

Experimental Study of Forward and Spot Markets: Contract Failure as a Contributing Factor of Vertical Integration

A probability of a partner not fulfilling his forward contract obligations (contract failure) increases in a transition economy. This project investigates the process of price and quantity discovery in a laboratory setting when there is (1) an endogenous choice between forward and spot market institutions and vertical integration; and (2) a certain probability of forward contract failure. The results suggest that in some cases a contract failure creates incentives to integration. To develop a system, which efficiently allocates resources, the state policy should be oriented toward strengthening the legal system and developing of the spot market, which may act like an insurance mechanism for the failed forward tradesforward contract; spot market; vertical integration; contract failure; experiment.

Impact of foreign economic sanctions on the Russian market of bonds denominated in foreign currencies

The market of Russian bonds denominated in foreign currencies was considered as the primary target for the initial package of the USA and EU economic sanctions in 2014. The analyses showed that, by the end of 2017, there was a significant reduction in the number of outstanding bond issues denominated in foreign currencies and a sharp increase in the bonds nominal volume evaluated in Russian rubles. The sanctions did not lead to a significant change in the structure of the market either from the standpoint of the number of bond issues denominated in foreign currencies or in terms of their nominal value. However, the number of foreign currencies in which bond issues were denominated was reduced from 11 to 6