A market with frictions in the matching process: An experimental study

Timothy N. Cason, Charles Noussair

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

We construct a laboratory market in which there is a friction in the matching between buyers and sellers. Sellers simultaneously post prices and then buyers simultaneously choose a seller. If more than one buyer chooses the same seller, the seller's single unit is randomly sold to one of them. Our results show a broad consistency with theoretical predictions, although price dispersion exists and is slow to decay. Prices also exceed the equilibrium level when there are only two sellers, and buyers' purchase probabilities are insufficiently responsive to price differences when there are two sellers.

Original languageEnglish (US)
Pages (from-to)665-691
Number of pages27
JournalInternational Economic Review
Volume48
Issue number2
DOIs
StatePublished - May 2007
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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