Market culture
Subtitle: how norms governing exploding offers affect market performance
By: Muriel Niederle, Alvin E. Roth.
Contributors: Roth, Alvin E., 1951-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10256; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10256.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Markets -- Mathematical models.
Description: "Many markets have organizations that influence or try to establish norms concerning when offers can be made, accepted and rejected.  Examining a dozen previously studied markets suggests that markets in which transactions are made far in advance are markets in which it is acceptable for firms to make exploding offers, and unacceptable for workers to renege on commitments they make, however early.  But this evidence is only suggestive, because the markets differ in many ways other than norms concerning offers.  Laboratory experiments allow us to isolate the effects of exploding offers and binding acceptances.  In a simple environment, in which uncertainty about applicants' quality is resolved over time, we find inefficient early contracting when firms can make exploding offers and applicants' acceptances are binding.  Relaxing either of these two conditions causes matching to take place later, when more information about applicants' qualities is available, and consequently results in higher efficiency and fewer blocking pairs.  This suggests that elements of market culture may play an important role in influencing market performance"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/21/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.