What if Hayek goes shopping in the bazaar?
AbstractThe paper presents a comparative analysis of the peculiar institutional features of two retail markets: the middle eastern Bazaar and the western Mall (shopping center). We study the informational functions and performance of the different market institutions using an Agent Based Computational Economics (ACE) model under the assumption of behavioral learning by agents. Sellers decide which price setting strategy to adopt whereas buyers form their price beliefs exploring the market and decide which price to accept. The agents learn how to adapt and behave within the specific institutional framework to carry out their economic transactions, but market institutions, as mechanisms to coordinate information of market participants are expected to affect the price dynamics. The main area of interest concerns the question of whether the economic argument on the presumed underperformance of bazaar institutions respect to more competitive markets holds true or it is necessary a reassessment on it.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 367.
Date of creation: 21 Jun 2006
Date of revision: 21 Jun 2006
Agent's beliefs; learning; adaptive behavior; market institutions; price dynamics;
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- D40 - Microeconomics - - Market Structure and Pricing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-CBE-2006-11-12 (Cognitive & Behavioural Economics)
- NEP-CMP-2006-11-12 (Computational Economics)
- NEP-EVO-2006-11-12 (Evolutionary Economics)
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