The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market
AbstractThis paper investigates the formation of prices in a perishable goods market where agents bargain repeatedly through pair-wise interactions. After extensive field observations, we chose to focus on two aspects that seem important to actors of this market : the passage of time and update in judgement when gathering information. The main feature of the market is that a seller bargaining with a buyer has incomplete information about buyer's willingness to pay and is not sure how her trading partner will evaluate an offer or compare it with other options. On the other hand, buyers have limited time to look for good sand cannot meet all possible sellers before making a decision. Hence agents cannot calculate the best price to offer but receive information through limited interactions, and use this information to choose their actions. An agent-based model was built to represent a frame work that mimics the observed market institution and where agent's possible behaviours and learning was made as consistent as possible with gathered data. Simulations were run, first for sensitivity analysis concerning main parameters, then to test the dependence of agents'learning to (a) the time buyers can spend on the market and (b) the frequency of update in learning by sellers. To validate the model, features produced by the simulated market are compared to the stylized facts gathered for negotiation about four goods. We reproduce the main features of the data on the dynamics of offers, transaction prices and agents'behavior during the bargaining phases.
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Date of creation: 15 Jan 2009
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agent-based model; bargaining; perishable goods; pair-wise interac-tion; decentralized market;
Other versions of this item:
- Moulet, Sonia & Rouchier, Juliette, 2008. "The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market," Journal of Economic Dynamics and Control, Elsevier, vol. 32(7), pages 2322-2348, July.
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