Lukas Wenner, post-doc, University of Cologne
The focus of this research is on markets where quality is known by sellers, but not buyers. The classic lemons result is that only low quality products will trade in equilibrium, but past experiments have found that buyers have a difficult time recognizing this. The design varies the number of buyers and sellers who are in the market (one of each or two of each) and who makes price proposals. The main point of the experiment is to see if competition will reduce the degree to which buyers are exploited.