Carrillo, Juan D; Palfrey, Thomas R - C.E.P.R. Discussion Papers - 2007
individuals to engage in exchange where trade is not mutually profitable. We first establish a no-trade theorem for this … environment. A laboratory experiment is conducted, where trade is found to occur between 16% and 32% of the time, depending on the … sellers. An equilibrium model with naive, or 'cursed' beliefs accounts for some of the behaviour findings, but open questions …