Unraveling Results from Comparable Demand and Supply: An Experimental Investigation

Muriel Niederle (), Alvin Roth and Utku Unver

No 15006, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early offers and workers are willing to accept them. We present a model and experiment in which workers' quality becomes known only in the late part of the market. However, in equilibrium, matching can occur (inefficiently) early only when there is comparable demand and supply: a surplus of applicants, but a shortage of high quality applicants.

JEL-codes: C78 C9 C92 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-exp
Note: LS
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Citations: View citations in EconPapers (2)

Published as Muriel Niederle & Alvin E. Roth & M. Utku Ãnver, 2013. "Unraveling Results from Comparable Demand and Supply: An Experimental Investigation," Games, MDPI, Open Access Journal, vol. 4(2), pages 243-282, June.

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Journal Article: Unraveling Results from Comparable Demand and Supply: An Experimental Investigation (2013)
Working Paper: Unraveling Results from Comparable Demand and Supply: An Experimental Investigation (2008)
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