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The influence of seller learning and time constraints on sequential bargaining in an artificial perishable goods market

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  • Moulet, Sonia
  • Rouchier, Juliette

Abstract

This 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 goods and 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 framework that mimics the observed market institution and where agent's possible behaviors 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 dependance 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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  • 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.
  • Handle: RePEc:eee:dyncon:v:32:y:2008:i:7:p:2322-2348
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    Cited by:

    1. Lamieri, Marco & Bertacchini, Enrico, 2006. "What if Hayek goes shopping in the bazaar?," MPRA Paper 367, University Library of Munich, Germany, revised 21 Jun 2006.
    2. Ahmet Ozkardas & Agnieszka Rusinowska, 2013. "An application of wage bargaining to price negotiation with discount factors varying in time," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00881151, HAL.
    3. Juliette Rouchier, 2013. "The Interest of Having Loyal Buyers in a Perishable Market," Computational Economics, Springer;Society for Computational Economics, vol. 41(2), pages 151-170, February.
    4. Renaud Bourlès & Juliette Rouchier, 2012. "Evolving Informal Risk-Sharing Cooperatives and Other-Regarding Preferences," Working Papers halshs-00793706, HAL.
    5. Victorien Barbet & Renaud Bourlès & Juliette Rouchier, 2017. "Informal Risk-Sharing Cooperatives: The Effect of Learning and Other-Regarding Preferences," AMSE Working Papers 1706, Aix-Marseille School of Economics, Marseille, France.
    6. Alan Kirman & Sonia Moulet & Rainer Schulz, 2008. "Price Discrimination and Customer Behaviour: Empirical Evidence from Marseille," Working Papers halshs-00349036, HAL.
    7. Joshua Sherman & Avi Weiss, 2015. "Price Response, Asymmetric Information and Competition," Economic Journal, Royal Economic Society, vol. 125(589), pages 2077-2115, December.

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