Article ID Journal Published Year Pages File Type
883980 Journal of Economic Behavior & Organization 2010 5 Pages PDF
Abstract

We study how the number of traders affects the interaction between a centralized exchange and bilateral negotiations in an experimental labor market with excess supply and incomplete contracts. Our large markets are three times as large as our small markets. In bilateral negotiations firms obtain information about employees’ performance in previous jobs. Though market forces put a downward pressure on wages in large markets, reciprocal tendencies do not differ. Hence, the occurrence of bilateral negotiations increases overall efficiency for both market sizes.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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