|
EconStor >
University of California (UC) >
UC Santa Cruz, Economics Department >
Working Papers, Economics Department, UC Santa Cruz >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/64539
|
| | |
| Title: | | An experiment on the core  |
| Authors: | | Yan, Huibin Friedman, Daniel |
| Issue Date: | | 2008 |
| Series/Report no.: | | Working Papers, UC Santa Cruz Economics Department 640 |
| Abstract: | | Each of n >= 1 identical buyers (and m >= 1 identical sellers) wants to buy (sell) a single unit of an indivisible good. The core predicts a unique and extreme outcome: the entire surplus is split evenly among the buyers when m > n and among the sellers when m < n; the long side gets nothing. We test this core conjecture in the lab with n + m = 3 or 5 randomly rematched traders and minimal imbalances (m = n +- 1) in three market institutions. In the standard continuous double auction, the surplus indeed goes overwhelmingly towards the short side. The DA-Chat institution allows traders to have cheap talk prior to the double auction, while the DA-Barg institution allows the long siders to negotiate enforceable profit sharing agreements while trading. Despite frequent attempts to collude and occasional large deviations from the core prediction, we find that successful collusion is infrequent in both new institutions. A disproportionate fraction of the successful collusions are accompanied by appeals to fairness. |
| Subjects: | | core market experiment fairness |
| JEL: | | C71 C78 C92 D43 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Papers, Economics Department, UC Santa Cruz
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/64539
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|