Competition on common value markets with naèive traders: a theoretical and experimental analysis

Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson and Bazerman 1985) by allowing for competition of both, buyers and sellers. Naivety of both is related to the idea that higher prices exclude worse qualities. While competition of naive buyers increases prices, competition of naive sellers promotes effciency enhancing trade. Our predictions are tested experimentally.

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Year of publication:	2007
Authors:	Chlaß, Nadine ; Güth, Werner
Publisher:	Jena : Friedrich Schiller University Jena and Max Planck Institute of Economics
Subject:	Übernahme \| Wettbewerb \| Auktionstheorie \| Unvollkommene Information \| Test

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Series:	Jena Economic Research Papers ; 2007,105
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	559549520 [GVK] hdl:10419/25679 [Handle]
Classification:	D01 - Microeconomic Behavior: Underlying Principles ; D42 - Monopoly ; D43 - Oligopoly and Other Forms of Market Imperfection ; D44 - Auctions ; D61 - Allocative Efficiency; Cost-Benefit Analysis ; D82 - Asymmetric and Private Information ; L13 - Oligopoly and Other Imperfect Markets ; L15 - Information and Product Quality; Standardization and Compatibility
Source:	EconStor

Persistent link: https://www.econbiz.de/10010263850