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Uncertainty and Shopping Behaviour: An Experimental Analysis

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Author Info
Grether, David M
Schwartz, Alan
Wilde, Louis L

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Abstract

This paper reports experimental tests of three search equilibrium models. These models, which differ only in the search strategies available to the buyers, have qualitatively different predictions. The experimental ou tcomes generally were consistent with the models' predictions. This s uggests that debate on the utility of this class of models should shi ft to the realism of the models' assumptions rather than focus on the ir ability to characterize market outcomes. Also, since the basic mod els have been validated, the project of analyzing experimentally the results of relaxing some of their assumptions seems worthwhile. Copyright 1988 by The Review of Economic Studies Limited.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 55 (1988)
Issue (Month): 2 (April)
Pages: 323-42
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Handle: RePEc:bla:restud:v:55:y:1988:i:2:p:323-42

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  1. Klaus Adam, 2001. "Competitive Prices in Markets with Search and Information Frictions," CSEF Working Papers 55, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
  2. Timothy N. Cason & Daniel Friedman, 2000. "Buyer Search and Price Dispersion: A Laboratory Study," Econometric Society World Congress 2000 Contributed Papers 1549, Econometric Society. [Downloadable!]
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  3. Sebnem Bahadir-Lust & Jens-Peter Loy & Christoph R. Weiss, 2007. "Are they always offering the lowest price? An empirical analysis of the persistence of price dispersion in a low inflation environment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 777-788. [Downloadable!]
  4. James Cox & Ronald Oaxaca, 2000. "Good News and Bad News: Search from Unknown Wage Offer Distributions," Experimental Economics, Springer, vol. 2(3), pages 197-225, March. [Downloadable!] (restricted)
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