Competition on Common Value Markets with Naive Traders– A Theoretical and Experimental Analysis

Theoretically and experimentally, we generalize the analysis of acquiringa company (Samuelson and Bazerman 1985) by allowing for competition ofboth, buyers and sellers. Naivety of both is related to the idea that higherprices exclude worse qualities. While competition of naive buyers increasesprices, competition of naive sellers promotes e±ciency enhancing trade. Ourpredictions are tested experimentally.

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Year of publication:	2007-12-01
Authors:	Chlaß, Nadine ; Güth, Werner
Institutions:	Max-Planck-Institut für Ökonomik <Jena> / Abteilung Strategische Interaktion
Subject:	Unternehmenskauf \| Unvollkommene Information \| incomplete information \| Experimentelle Wirtschaftsforschung \| experiment \| Auktionstheorie \| auction

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Extent:	22 p. 603,31 p. application/pdf
Series:	Max-Planck-Institut für Ökonomik - Papers on Strategic Interaction Jena Economic Research Papers ; 105 (2007)
Type of publication:	Book / Working Paper
Language:	English
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 ; Strategic management ; Forecast, decision making ; Corporate growth, plant size and choice of location ; Simulation methods ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10005866465