Price, Quality and Timing of Moves in Markets with Incomplete Information: An Experimental Analysis.

This paper reports the results of theoretical and experimental analyses of search models of shopping behavior. Earlier work which dealt with markets for homogeneous goods in which sellers first determined their prices and buyers then decided upon their information acquisition (shopping) strategies conditional upon the distribution of prices showed that Nash equilibria for these markets were good predictions of outcomes of laboratory experiments. The authors extend the analysis to markets with heterogeneous goods and allow buyers and sellers to move simultaneously. The results of a series of laboratory experiments indicate that the Nash equilibria continue to be good predictions in these more realistic settings. Copyright 1992 by Royal Economic Society.