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Decentralized matching markets with(out) frictions: a laboratory experiment

Published online by Cambridge University Press:  14 March 2025

Joana Pais ,
Ágnes Pintér  and
Róbert F. Veszteg Open the ORCID record for Róbert F. Veszteg [Opens in a new window]
Joana Pais*
Affiliation:
ISEG, UECE (Research Unit in Complexity in Economics) and REM (Research in Economics and Mathematics), Universidade de Lisboa, Rua Miguel Lupi, 20, 1200-827 Lisboa, Portugal
Ágnes Pintér*
Affiliation:
Department of Economic Analysis, Universidad Autónoma de Madrid, Cantoblanco, 28049 Madrid, Spain
Róbert F. Veszteg*
Affiliation:
School of Political Science and Economics, Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, 169-8050 Tokyo, Japan
*
[email protected]
[email protected]
[email protected]
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Abstract

In a series of laboratory experiments, we explore the impact of different market features (the level of information, search costs, and the level of commitment) on agents’ behavior and on the outcome of decentralized matching markets. In our experiments, subjects on each side of the market actively search for a partner, make proposals, and are free to accept or reject any proposal received at any time throughout the game. Our results suggest that a low information level does not affect the stability or the efficiency of the final outcome, although it boosts market activity, unless coupled with search costs. Search costs have a significant negative impact on stability and on market activity. Finally, commitment harms stability slightly but acts as a disciplinary device to market activity and is associated with higher efficiency levels of the final outcome.

Keywords

Decentralized marketsTwo-sided matchingStabilityEfficiencyLaboratory experiments

JEL classification

C78: Bargaining Theory • Matching Theory C91: Laboratory, Individual Behavior D82: Asymmetric and Private Information • Mechanism Design
Type
Original Paper
Information
Experimental Economics , Volume 23 , Issue 1 , March 2020 , pp. 212 - 239
Copyright
Copyright © 2019 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-019-09606-1) contains supplementary material, which is available to authorized users.

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