A Laboratory Investigation of Networked Markets

Datos Bibliográficos

ID9718948
AutoresAlessandra Cassar (0000-0001-9944-0396, University of San Francisco), Daniel Friedman (0000-0003-1068-1797, University of California, Santa Cruz), Patricia Schneider (0000-0003-1425-0687, Agnes Scott College), P H Schneider (Agnes Scott College)
Año2010
Volumen120
Número547
Páginas919-943
Fecha de publicación2010-09-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2009.02326.x
OpenAlexW2138419341
IdiomaEN
Citas recibidas1
Referencias citadas37

When contracts are not perfectly enforceable, can interpersonal networks improve market efficiency? We introduce certain exogenous networks into laboratory markets in which traders can cheat in 'international' but not in 'domestic' transactions. We examine four network configurations, one of which has the potential to achieve 100% efficiency. Theoretical upper bounds correctly predict the main qualitative trade patterns across our network configurations but overpredict observed efficiency. Our networks increase international trade volume, reduce domestic volume and divert high surplus transactions to international networks. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009

Business · Economics · Financial economics · Industrial organization · Market efficiency · Microeconomics · Volume (thermodynamics · Auction Theory and Applications · Computer Science · Experimental Behavioral Economics Studies · Game Theory and Applications