Should the Same Side of the Market Always Move First in a Transaction?. An Experimental Study

Eline van der Heijden (), Jan Nelissen () and Harrie A.A. Verbon

Journal of Institutional and Theoretical Economics (JITE), 2002, vol. 158, issue 2, 344-367

Abstract: We investigate whether transactions where the buyer (or seller) always moves first and the seller (or buyer) always moves second in the exchange give higher payoffs than transactions in which it is randomly determined who moves first. We examine the effect of two treatment variables: partners versus strangers, and fixed versus changing positions. We find that both with fixed and with changing positions, second movers take advantage of their position by exploiting the first mover. But with fixed positions, exploitation occurs significantly less, while reciprocal exchanges happen more often. However, fixed positions result in very unevenly distributed payoffs.

JEL-codes: C90 D63 L14 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (1)

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Working Paper: Should the Same Side of the Market always move first in a Transaction? An Experimental Study (2001)
Working Paper: Should the Same Side of the Market Always Move First in a Transaction? An Experimental Study (2000)
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