Endogenous Market Institutions: Experimental Evidence

Morten Søberg

Nordic Journal of Political Economy, 2004, vol. 30, 91-119

Abstract: A wide variety of market institutions exist in the field and on the Internet. Examples are English auctions and two-sided marketplaces like the double auction where both buyers and sellers initiate prices. This paper investigates how the emergence of (different) market institutions is shaped by buyers’ and sellers’ institutional preferences. The experimental evidence reveals that both buyers and sellers in the main prefer market institutions that restrict the ability to make price offers to their side of the market. However, when buyers and sellers are allowed to express both first and second choices, the double auction emerges as the most viable market institution.

Keywords: Market institutions; institutional preferences; voting rules; experimental economics (search for similar items in EconPapers)
JEL-codes: C92 D44 D70 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:noj:journl:v:30:y:2004:p:91-119

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