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American Economic Journal: Microeconomics: Vol. 1 No. 2 (August 2009)
AEJ: Micro Volume. 1, Issue 2 | 
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AEJ: Micro Forthcoming Articles
Trading in Networks: A Normal Form Game Experiment
Article Citation
Gale, Douglas M., and
Shachar Kariv. 2009. "Trading in Networks: A Normal Form Game Experiment."
American Economic Journal: Microeconomics,
1(2): 114-32.
DOI: 10.1257/mic.1.2.114
DOI: 10.1257/mic.1.2.114
Abstract
This paper reports an experimental study of trading networks.
Networks are incomplete in the sense that each trader can only
exchange assets with a limited number of other traders. The greater
the incompleteness of the network, the more intermediation is
required to transfer the assets between initial and final owners. The
uncertainty of trade in networks constitutes a potentially important
market friction. Nevertheless, we find the pricing behavior observed
in the laboratory converges to competitive equilibrium behavior in
a variety of treatments. However, the rate of convergence varies
depending on the network, pricing rule, and payoff function. (JEL
C91, C92, G10, G19)
Article Full-Text Access
Full-text Article
Additional Materials
Download Data Set (457.29 KB) | Online Appendices (520.87 KB)
Authors
Gale, Douglas M. (NYU)
Kariv, Shachar (U CA, Berkeley)
Kariv, Shachar (U CA, Berkeley)
JEL Classifications
C91: Design of Experiments: Laboratory, Individual
C92: Design of Experiments: Laboratory, Group Behavior
G10: General Financial Markets: General (includes Measurement and Data)
G19: General Financial Markets: Other
C92: Design of Experiments: Laboratory, Group Behavior
G10: General Financial Markets: General (includes Measurement and Data)
G19: General Financial Markets: Other
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