Posted prices, bargaining and auctions: an experimental examination

Project: Research

Project Description

This project uses economic methods to investigate how trading institutions affect prices and efficiency. We examine markets with directed search: buyers visit sellers based on any information they have. Simultaneous buyer choices and sellers' capacity constraints lead to 'frictions' where not all profitable exchanges occur - more realistic than the usual 'frictionless' assumption. We vary (a) whether sellers can post prices in advance; and (b) whether and how negotiation occurs based on how many buyers (1 vs. 2+) visit a seller. We use results from auction, bargaining, game and search theories, and new analysis, to form predictions, which we test using experiments. Our results should have implications for labour and competition policies.
StatusActive
Effective start/end date1/01/1431/12/19

Funding

  • Australian Research Council (ARC): AUD230,000.00
  • Australian Research Council (ARC)
  • Australian Research Council (ARC)
  • Monash University