Market games as social dilemmas
Date
2018ISSN
0167-2681Source
Journal of Economic Behavior & OrganizationVolume
155Pages
435-444Google Scholar check
Metadata
Show full item recordAbstract
In an experimental exchange market based on Shapley and Shubik (1977), two types of players with different preferences and endowments independently submit quantities of the goods they wish to exchange. In this context, although the Nash equilibria of the game involve zero or minimum trade, we obtain intense trade close to levels that maximize social welfare. Going a step forward, we implement communication within pairs of traders from the same (horizontal) and opposite (vertical) sides of the market. Overall, we find that horizontal communication tends to reduce bids whereas vertical communication has no effect.