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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/26057
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| Title: | | On the evolution of market institutions: the platform design paradox  |
| Authors: | | Alós-Ferrer, Carlos Kirchsteiger, Georg Walzl, Markus |
| Issue Date: | | 2007 |
| Series/Report no.: | | CESifo working paper 2012 |
| Abstract: | | We study competition among market designers who create new trading platforms, when boundedly rational traders learn to select among them. We ask whether efficient platforms, leading to market - clearing trading outcomes, will dominate the market in the long run. If several market designers are competing, we find that traders learn to select non-market clearing platforms with prices systematically above the market-clearing level, provided at least one such platform is introduced by a market designer. This in turn leads market designers to introduce non-market clearing platforms. Hence platform competition induces non-competitive market outcomes. |
| JEL: | | C72 D4 D83 L1 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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