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Uncertainty and Shopping Behaviour: An Experimental Analysis.

  • Philosophy


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. The experimental ou tcomes generally were consistent with the models' predictions. This s uggests that debate on the utility of this class of models should shi ft to the realism of the models' assumptions rather than focus on the ir ability to characterize market outcomes. Also, since the basic mod els have been validated, the project of analyzing experimentally the results of relaxing some of their assumptions seems worthwhile. Copyright 1988 by The Review of Economic Studies Limited.

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