Competition on Common Value Markets with Näıve Traders – A Theoretical and Experimental Analysis -
نویسندگان
چکیده
Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson and Bazerman 1985) by allowing for competition of both buyers and sellers. Näıvety of both is related to the idea that higher prices exclude lower qualities. While competition of näıve buyers increases prices, competition of näıve sellers promotes efficiency enhancing trade. Our predictions are tested experimentally. We find empirical support both for the näıvety assumption and the resulting welfare-enhancing effect. JEL Classification: D01,D42,D61,D82,L13
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