Partial equilibrium mechanism and inter-sectoral coordination: an experiment

Hanaki, N., Hayashi, T. , Lombardi, M. and Ogawa, K. (2021) Partial equilibrium mechanism and inter-sectoral coordination: an experiment. Journal of Economic Behavior and Organization, 190, pp. 366-389. (doi: 10.1016/j.jebo.2021.07.038)

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Abstract

This study experimentally evaluates the performance of partial equilibrium mechanisms when different sectors run their mechanisms separately, despite the existence of complementarity between them. In our simple laboratory experiment setting that includes two sectors, each sector runs the top-trading-cycle mechanism. There is a Pareto-dominant equilibrium, but it requires coordination across sectors. Our results show that coordination failure occurs more frequently when there is asymmetry between the two sectors compared with the one-sector benchmark, even without inter-sectoral complementarity. When mechanisms are run sequentially across the two sectors, such failure is substantially reduced, compared with when they are run simultaneously.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Hayashi, Professor Takashi and Lombardi, Dr Michele
Authors: Hanaki, N., Hayashi, T., Lombardi, M., and Ogawa, K.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Economic Behavior and Organization
Publisher:Elsevier
ISSN:0167-2681
ISSN (Online):1879-1751
Published Online:19 August 2021
Copyright Holders:Copyright © 2021 Elsevier B.V.
First Published:First published in Journal of Economic Behavior and Organization 190: 366-389
Publisher Policy:Reproduced in accordance with the publisher copyright policy

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