Decentralized matching markets with(out) frictions: a laboratory experiment
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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.
KeywordsDecentralized markets Two-sided matching Stability Efficiency Laboratory experiments
JEL ClassificationC78 C91 D82
We are thankful to the editor and two anonymous referees for comments and excellent suggestions. Joana Pais gratefully acknowledges financial support from the Fundação para a Ciência e a Tecnologia under project reference no. PTDC/IIM-ECO/4546/2014. Ágnes Pintér gratefully acknowledges financial support from the project SEJ2007-67135 and the Juan de la Cierva program of the Spanish Ministry of Science and Innovation.
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