Choice of Auction or Negotiation in Linked Laboratory Markets: Cattle Market Implications

Owen R. Phillips, Christopher T. Bastian, Benjamin R. Cook, Dale J. Menkhaus and Shen Gao

No 360827, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: We analyze behavior and market outcomes when agents face an endogenous choice of trading in either English auction or private negotiation. We develop a theoretical model to illustrate agent value for a trading institution. We then conduct market experiments with stable supply and demand conditions and sequentially linked English auction then negotiation (or auction then negotiation) institutions, allowing agents transaction institution choice. Linked prices converge to levels between those observed in auction or negotiation alone. Quantities sold and total welfare increases in these linked markets. Our results extend the literature and offer insights for both fed and feeder cattle markets.

Keywords: Marketing (search for similar items in EconPapers)
Pages: 37
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360827

DOI: 10.22004/ag.econ.360827

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