IDEAS home Printed from https://ideas.repec.org/p/kob/dpaper/dp2011-10.html
   My bibliography  Save this paper

Impact of Ethnicities on Market Outcome: Results of Market Experiments in Kenya

Author

Listed:
  • Ken-Ichi Shimomura

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Takehiko Yamato

    (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology, Japan)

Abstract

We study market exchange in the laboratory by a multiethnic experiment in Kenya. The subjects of our experiment are of three ethnicities, Kikuyu, Luo, and Kalenjin. Our model contains two types of consumers and two kinds of commodities, and three competitive equilibria exist. The two equilibria with the lowest, and highest relative prices are beneficial for one type of the consumers, and the intermediate price gives an equitable allocation. The tatonnement dynamics however predict that relative prices diverge from the intermediate equilibrium towards the lowest equilibrium or the highest equilibrium depending on initial prices. In order to examine how much effect the ethnicities of subjects have on the equilibrium selection, we conducted manual experiments of pit market trading with different combinations of ethnicities of subjects. Our result shows strong support for the convergence to the intermediate equilibrium when Kalenjin subjects participated, whereas no such data are obtained without them. In addition, the frequencies of transactions with Kalenjin subjects were significantly less than that with the other subjects only, and the less frequent transactions resulted in the more efficient outcomes of the experimental market.

Suggested Citation

  • Ken-Ichi Shimomura & Takehiko Yamato, 2011. "Impact of Ethnicities on Market Outcome: Results of Market Experiments in Kenya," Discussion Paper Series DP2011-10, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2011-10
    as

    Download full text from publisher

    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2011-10.pdf
    File Function: First version, 2011
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timothy Cason & Tatsuyoshi Saijo & Takehiko Yamato, 2002. "Voluntary Participation and Spite in Public Good Provision Experiments: An International Comparison," Experimental Economics, Springer;Economic Science Association, vol. 5(2), pages 133-153, October.
    2. Anderson, Christopher M. & Plott, Charles R. & Shimomura, K.-I.Ken-Ichi & Granat, Sander, 2004. "Global instability in experimental general equilibrium: the Scarf example," Journal of Economic Theory, Elsevier, vol. 115(2), pages 209-249, April.
    3. Shapley, Lloyd S & Shubik, Martin, 1977. "An Example of a Trading Economy with Three Competitive Equilibria," Journal of Political Economy, University of Chicago Press, vol. 85(4), pages 873-875, August.
    4. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 322-322.
    5. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation for Research in Economics, Yale University.
    6. Juergen Huber & Martin Shubik & Shyam Sunder, 2009. "Default Penalty as a Disciplinary and Selection Mechanism in Presence of Multiple Equilibria," Cowles Foundation Discussion Papers 1730, Cowles Foundation for Research in Economics, Yale University.
    7. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-1095, December.
    8. David Gale, 1963. "A note on global instability of competitive equilibrium," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 10(1), pages 81-87, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Junyi Shen & Ken-Ichi Shimomura & Takehiko Yamato & Tokinao Ohtaka & Kiyotaka Takahashi, 2015. "Revisiting Marshallian versus Walrasian Stability in an Experimental Market," Discussion Paper Series DP2015-30, Research Institute for Economics & Business Administration, Kobe University, revised May 2016.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Junyi Shen & Ken-Ichi Shimomura & Takehiko Yamato & Tokinao Ohtaka & Kiyotaka Takahashi, 2015. "Revisiting Marshallian versus Walrasian Stability in an Experimental Market," Discussion Paper Series DP2015-30, Research Institute for Economics & Business Administration, Kobe University, revised May 2016.
    2. Crockett, Sean & Friedman, Daniel & Oprea, Ryan, 2017. "Aggregation and convergence in experimental general equilibrium economies constructed from naturally occurring preferences," Discussion Papers, Research Professorship Market Design: Theory and Pragmatics SP II 2017-501, WZB Berlin Social Science Center.
    3. Steven Gjerstad, 2013. "Price dynamics in an exchange economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 461-500, March.
    4. Sean Crockett & Daniel Friedman & Ryan Oprea, 2021. "Naturally Occurring Preferences And General Equilibrium: A Laboratory Study," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(2), pages 831-859, May.
    5. Robert Jiro Netzer & Matthias Sutter, 2009. "Intercultural trust. An experiment in Austria and Japan," Working Papers 2009-05, Faculty of Economics and Statistics, Universität Innsbruck.
    6. Finocchiaro Castro, Massimo, 2008. "Where are you from? Cultural differences in public good experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2319-2329, December.
    7. Ehmke, Mariah & Lusk, Jayson & Tyner, Wallace, 2010. "Multidimensional tests for economic behavior differences across cultures," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 37-45, January.
    8. Alok Kumar & Martin Shubik, 2004. "Variations on the Theme of Scarf's Counter-Example," Computational Economics, Springer;Society for Computational Economics, vol. 24(1), pages 1-19, August.
    9. Crockett, Sean & Spear, Stephen & Sunder, Shyam, 2008. "Learning competitive equilibrium," Journal of Mathematical Economics, Elsevier, vol. 44(7-8), pages 651-671, July.
    10. Eric Budish & Judd B. Kessler, 2022. "Can Market Participants Report Their Preferences Accurately (Enough)?," Management Science, INFORMS, vol. 68(2), pages 1107-1130, February.
    11. Pedro Rey-Biel & Roman Sheremeta & Neslihan Uler, 2018. "When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 167-203, Emerald Group Publishing Limited.
    12. Horak, Sven, 2013. "Cross-cultural experimental economics and indigenous management research: Issues and contributions," Working Papers on East Asian Studies 92/2013, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    13. Prasad, Kislaya & Salmon, Timothy C., 2013. "Self Selection and market power in risk sharing contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 90(C), pages 71-86.
    14. Timothy N. Cason & Daniel Friedman & Ed Hopkins, 2021. "An Experimental Investigation of Price Dispersion and Cycles," Journal of Political Economy, University of Chicago Press, vol. 129(3), pages 789-841.
    15. Andreas Ziegler & Giorgia Romagnoli & Theo Offerman, 2020. "Morals in multi-unit markets," Tinbergen Institute Discussion Papers 20-072/I, Tinbergen Institute, revised 10 Feb 2021.
    16. Rabani, Yuval & Schulman, Leonard J., 2021. "The invisible hand of Laplace: The role of market structure in price convergence and oscillation," Journal of Mathematical Economics, Elsevier, vol. 95(C).
    17. Timothy Cason & Tatsuyoshi Saijo & Takehiko Yamato, 2002. "Voluntary Participation and Spite in Public Good Provision Experiments: An International Comparison," Experimental Economics, Springer;Economic Science Association, vol. 5(2), pages 133-153, October.
    18. Lensberg, T. & van der Heijden, E.C.M., 1998. "A cross-cultural study of reciprocity, trust and altruism in a gift exchange experiment," Other publications TiSEM 49000813-87d9-46f2-a25b-e, Tilburg University, School of Economics and Management.
    19. Corgnet, Brice & Sutan, Angela & Veszteg, Róbert F., 2011. "My teammate, myself and I: Experimental evidence on equity and equality norms," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 347-355, August.
    20. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 207-231, August.

    More about this item

    Keywords

    Economic Experiment; Kenya; Pit Market; Perfect Competition; Multiple Equilibria;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kob:dpaper:dp2011-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University (email available below). General contact details of provider: https://edirc.repec.org/data/rikobjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.