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Uncertainty and Shopping Behavior: An Experimental Analysis

Grether, David M. and Schwartz, Alan and Wilde, Louis L. (1987) Uncertainty and Shopping Behavior: An Experimental Analysis. Social Science Working Paper, 511. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper reports experimental tests of three search equilibrium models. These models which differ only in the search strategies available to the buyers have qualitatively different predictions, that is, equilibria: price distributions, single price equilibria at the competitive price and at the monopoly price and two price equilibria. The experimental outcomes generally were consistent with the models' predictions. This suggests that debate on the utility of this class of models should shift to the realism of the models' assumptions rather than focus on their ability to characterize market outcomes. Also, since the basic models have been validated, the project of analyzing experimentally the results of relaxing some of their assumptions seems worthwhile.

Item Type:Report or Paper (Working Paper)
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Additional Information:Revised. Original dated to March 1984. The support of the National Science Foundation Grant No. SES 81-17708 is gratefully acknowledged. James Gerard provided very useful assistance in the running of these experiments. Published as Grether, David M., Alan Schwartz, and Louis L. Wilde. "Uncertainty and shopping behaviour: an experimental analysis." The Review of Economic Studies 55.2 (1988): 323-342.
Group:Social Science Working Papers
Funding AgencyGrant Number
Subject Keywords:Monopoly, Modeling, Business orders, Shopping, Fixed costs, Consumer prices, Unit costs, Chalkboards, Economic models, Nash equilibrium
Series Name:Social Science Working Paper
Issue or Number:511
Record Number:CaltechAUTHORS:20170920-150120256
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81640
Deposited By: Jacquelyn Bussone
Deposited On:20 Sep 2017 22:18
Last Modified:03 Oct 2019 18:45

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