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

Author

Listed:
  • Joana Pais

    (Universidade de Lisboa)

  • Ágnes Pintér

    (Universidad Autónoma de Madrid)

  • Róbert F. Veszteg

    (Waseda University)

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.

Suggested Citation

  • Joana Pais & Ágnes Pintér & Róbert F. Veszteg, 2020. "Decentralized matching markets with(out) frictions: a laboratory experiment," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 212-239, March.
    • Handle: RePEc:kap:expeco:v:23:y:2020:i:1:d:10.1007_s10683-019-09606-1
    DOI: 10.1007/s10683-019-09606-1
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    Cited by:

    1. He, Simin & Wu, Jiabin & Zhang, Hanzhe, 2021. "Experimental and Noncooperative Analyses of Decentralized Matching with Transfers," Working Papers 2021-2, Michigan State University, Department of Economics.
    2. Dolgopolov, Arthur & Houser, Daniel & Martinelli, Cesar & Stratmann, Thomas, 2024. "Assignment markets: Theory and experiments," European Economic Review, Elsevier, vol. 165(C).
    3. Jinzhao Du & Ying Lei, 2022. "Information design of matching platforms when user preferences are bidimensional," Production and Operations Management, Production and Operations Management Society, vol. 31(8), pages 3320-3336, August.

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    More about this item

    Keywords

    Decentralized markets; Two-sided matching; Stability; Efficiency; Laboratory experiments;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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