Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-51509
Lindsay, Luke (2011). Market Experience and Willingness to Trade: Evidence from Repeated Markets with Symmetric and Asymmetric Information. Working paper series / Department of Economics No. 05, University of Zurich.
Many studies have found a gap between willingness-to-pay and willingness-to-accept that is inconsistent with standard theory. There is also evidence that the gap is eroded by experience gained in the laboratory and naturally occurring markets. This paper argues that the gap and the effects of experience are explained by a caution heuristic. This conjecture is tested in a repeated market experiment with symmetric and asymmetric information. The results support the conjecture: people do seem to use heuristics rather than reacting optimally and their behavior adjusts slowly when the environment changes.
|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics|
Working Paper Series > Department of Economics
|JEL Classification:||D4, D81, D82|
|Deposited On:||25 Nov 2011 11:13|
|Last Modified:||17 Oct 2012 09:11|
|Series Name:||Working paper series / Department of Economics|
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