Decentralized matching markets with(out) frictions: a laboratory experiment

Joana Pais (), Ágnes Pintér and Róbert Veszteg

Experimental Economics, 2020, vol. 23, issue 1, No 9, 212-239

Abstract: Abstract In a series of laboratory experiments, we explore the impact of different market features (the level of information, search costs, and the level of commitment) on agents’ behavior and on the outcome of decentralized matching markets. In our experiments, subjects on each side of the market actively search for a partner, make proposals, and are free to accept or reject any proposal received at any time throughout the game. Our results suggest that a low information level does not affect the stability or the efficiency of the final outcome, although it boosts market activity, unless coupled with search costs. Search costs have a significant negative impact on stability and on market activity. Finally, commitment harms stability slightly but acts as a disciplinary device to market activity and is associated with higher efficiency levels of the final outcome.

Keywords: Decentralized markets; Two-sided matching; Stability; Efficiency; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C78 C91 D82 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Working Paper: Decentralized Matching Markets With(out) Frictions: A Laboratory Experiment (2017)
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DOI: 10.1007/s10683-019-09606-1

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