Price and Nonprice Information Frictions in Regional Arbitrage

The Case of Rice Traders in Antananarivo, Madagascar

Dados 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)
Ano2019
Volume67
Fascículo2
Páginas273-313
Data de publicação2019-01-01
Peer ReviewedSim
Open AccessNão
TipoARTICLE
PeriódicoEconomic Development and Cultural Change (JOURNAL)
Identificadores do periódicoISSN: 0013-0079 • E-ISSN: 1539-2988
EditoraUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/698163
OpenAlexW2794678740
IdiomaEN
Citações recebidas2
Referências 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