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Market games as social dilemmas

Iván Barreda-Tarrazona (), Aurora García-Gallego (), Nikolaos Georgantzís () and Nicholas Ziros

Journal of Economic Behavior & Organization, 2018, vol. 155, issue C, 435-444

Abstract: In an experimental exchange market based on Shapley and Shubik (1977), two types of players with different preferences and endowments independently submit quantities of the goods they wish to exchange. In this context, although the Nash equilibria of the game involve zero or minimum trade, we obtain intense trade close to levels that maximize social welfare. Going a step forward, we implement communication within pairs of traders from the same (horizontal) and opposite (vertical) sides of the market. Overall, we find that horizontal communication tends to reduce bids whereas vertical communication has no effect.

Keywords: Efficiency; Strategic market games; Experiments; Vertical communication; Horizontal communication (search for similar items in EconPapers)
JEL-codes: D43 C91 C73 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Market games as social dilemmas (2015) Downloads
Working Paper: Market games as social dilemmas (2015) Downloads
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