Price and Nonprice Information Frictions in Regional Arbitrage

The Case of Rice Traders in Antananarivo, Madagascar

Datos Bibliográficos

ID4361996
AutoresYutaka Arimoto (0000-0002-6505-4128, Hitotsubashi University), Hisaki Kono (0000-0002-6375-1456, Kyoto University), Tsilavo Ralandison (0000-0002-4062-1042, Kyoto University), Takeshi Sakurai (0000-0002-7989-8882), Kazushi Takahashi (0000-0003-2904-6080, Sophia University)
Año2019
Volumen67
Número2
Páginas273-313
Fecha de publicación2019-01-01
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaEconomic Development and Cultural Change (JOURNAL)
Identificadores de la revistaISSN: 0013-0079 • E-ISSN: 1539-2988
EditorialUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/698163
OpenAlexW2794678740
IdiomaEN
Citas recibidas2
Referencias citadas30

Traders’ arbitrage is crucial for regional market integration. We investigate the patterns of regional arbitrage of rice traders in Antananarivo, Madagascar. On the basis of a trader-level biweekly survey, we find that most traders do not buy rice at the lowest price including observed transportation costs. Random provision of regional price information, intended to reduce search costs, did not improve arbitrage performance. Traders continue trading with districts that they are used to because they worry about quality uncertainty and the trustworthiness of new partners. These findings suggest that nonprice information frictions are important obstacles of regional arbitrage and market integration

Arbitrage · Business · Economics · Financial economics · Quality (philosophy) · Trustworthiness · Economic Growth and Development · Firm Innovation and Growth · Global trade and economics