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Equilibrium Selection in Repeated Business-to-Business Matching Markets

Author

Listed:
  • Ernan Haruvy

    (University of Texas at Dallas)

  • M. Utku Ünver

    (Koc University)

Abstract

A two-sided matching framework is applied to repeated business-to- business procurement matches. Both static and dynamic solutions concepts--- namely Gale-Shapley deferred acceptance algorithm, learning dynamics, and genetic algorithms--- are used to obtain solutions. The settings under investigation include both full information and limited information settings. We show that under certain conditions the dynamic predictions refine the core of the matching market. According to the theoretical predictions, organizational buyers would be better off in buyer-proposing settings than in seller-proposing settings, whereas sellers would prefer the opposite. The salience of this theoretical prediction is tested and confirmed using experimental data under different environments.

Suggested Citation

  • Ernan Haruvy & M. Utku Ünver, 2003. "Equilibrium Selection in Repeated Business-to-Business Matching Markets," Experimental 0305004, EconWPA, revised 03 Dec 2004.
  • Handle: RePEc:wpa:wuwpex:0305004
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    References listed on IDEAS

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    1. C. Nicholas McKinney & Muriel Niederle & Alvin E. Roth, 2003. "The collapse of a medical clearinghouse (and why such failures are rare)," NBER Working Papers 9467, National Bureau of Economic Research, Inc.
    2. Shu-Heng Chen, John Duffy, Chia-Hsuan Yeh, . "Equilibrium Selection via Adaptation: Using Genetic Programming to Model Learning in a Coordination Game," The Electronic Journal of Evolutionary Modeling and Economic Dynamics, IFReDE - Université Montesquieu Bordeaux IV.
    3. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541 Elsevier.
    4. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    5. M. Utku Ünver, 2005. "On the survival of some unstable two-sided matching mechanisms," International Journal of Game Theory, Springer;Game Theory Society, vol. 33(2), pages 239-254, June.
    6. Arifovic, Jasmina, 1996. "The Behavior of the Exchange Rate in the Genetic Algorithm and Experimental Economies," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 510-541, June.
    7. John H. Kagel & Alvin E. Roth, 2000. "The Dynamics of Reorganization in Matching Markets: A Laboratory Experiment Motivated by a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 201-235.
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    Cited by:

    1. Boudreau, James W., 2010. "Stratification and growth in agent-based matching markets," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 168-179, August.

    More about this item

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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