Skills in the Marketplace: Market Equilibrium, Personality and Ability in a Field-Based Experiment

Nathan Fiala

No 290089, Working Paper series from University of Connecticut, Charles J. Zwick Center for Food and Resource Policy

Abstract: Classic economic theory predicts that markets will clear, leaving little or no marginal gains from trade left on the table. Laboratory experiments have largely confirmed this, though the results of recent field experiments have been mixed, with some artefactual markets in developing countries performing relatively inefficiently. I create a multi-round trading market in Uganda in order to explore the efficiency of trading and test if individual traits predict market efficiency and bargaining success. I use a rich dataset on individual characteristics, including indicators on personality, wealth and human capital. I find that measures of personality and human capital of the buyers and sellers predict levels of efficiency within rounds. The personality indicators are less correlated with individual success, though human capital remains important. Finally, rents obtained in the experiment correlate with wealth levels of participants two years later. The results suggest that market prowess can predict some lifetime outcomes and suggest an important role for individual personality in social efficiency outcomes. Future work on market and social efficiency outcomes will need to include an explicit role for individual personality.

Keywords: Agricultural and Food Policy; Marketing (search for similar items in EconPapers)
Pages: 43
Date: 2014-06-13
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucozwp:290089

DOI: 10.22004/ag.econ.290089

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