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

Joana Pais, Ágnes Pintér, Robert Ferenc Veszteg

Research output: Contribution to journalArticle

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.

Original languageEnglish
JournalExperimental Economics
DOIs
Publication statusPublished - 2019 Jan 1

Keywords

  • Decentralized markets
  • Efficiency
  • Laboratory experiments
  • Stability
  • Two-sided matching

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

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