Market Organisation and Trading Relationships

Gerard Weisbuch, Laboratoire de Physique Statistique, ENS, Paris
Alan Kirman, EHESS, Institut Universitaire de FRance and Universite d'Aix-Marseille III
Dorothea K Herreiner, Economics Department, University of Bonn

Abstract:
In this paper we give a theoretical model of buyers' behavior on a market for a perishable good where no prices are posted. We show that if buyers learn from their own previous experience there is a sharp division between those who learn to be loyal to certain sellers and those who continue to 'shop around'. This feature remains in more general models which are simulated and is consistent with empirical data from the Marseille fish market.

Published: The Economic Journal, 110 (April 2000), 411-436.