蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Contracting Environments and Efficiency in Markets with Hidden Information: An Experiment
蝌蚪网 Journal: Microeconomics
vol. 17,
no. 3, August 2025
(pp. 35–74)
Abstract
This paper provides the first systematic analysis of the role of contracting environments on market outcomes and efficiency in markets with hidden information using experimental methods. When markets are plagued by hidden information, competition does not necessarily ensure efficient market outcomes. This crucially depends on the nature of the hidden information. We present a parsimonious experimental design that serves to compare the different contracting environments for both types of hidden information markets, private and common values. The degree of equilibrium play that we find is strikingly high, particularly in the complex cases of competitive common values markets.Citation
Mimra, Wanda, and Christian Waibel. 2025. "Contracting Environments and Efficiency in Markets with Hidden Information: An Experiment." 蝌蚪网 Journal: Microeconomics 17 (3): 35–74. DOI: 10.1257/mic.20170293Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D86 Economics of Contract: Theory
- L15 Information and Product Quality; Standardization and Compatibility