Status in Markets

28 Pages Posted: 17 May 2011

See all articles by Catherine C. Eckel

Catherine C. Eckel

Texas A&M University

Sheryl B. Ball

Virginia Polytechnic Institute & State University - Department of Economics

Philip J. Grossman

Monash University - Department of Economics

William R. Zame

University of California, Los Angeles (UCLA) - Department of Economics

Date Written: February 1, 2001

Abstract

This project tests for the effect of social status in a laboratory experimental market. We consider a special ''box design" market in which a vertical overlap in supply and demand ensure that there are multiple equilibrium prices. We manipulate the relative social status of our subjects by awarding high status to a subset of the group based on one of two procedures. In the first, a subject's score on a trivia quiz determines his or her status; in another, subjects are assigned randomly to a higher-status or lower-status group. In both treatments we find that average prices are higher in markets where higher-status sellers face lower status buyers, and lower when buyers have higher status than sellers. Across all sessions, the higher-status side of the market captures a greater share of the surplus, earning significantly more than their lower-status counterparts.

Suggested Citation

Eckel, Catherine C. and Ball, Sheryl B. and Grossman, Philip J. and Zame, William R., Status in Markets (February 1, 2001). Quarterly Journal of Economics, Vol. 116, No. 1, 2001, Available at SSRN: https://ssrn.com/abstract=1843524

Catherine C. Eckel (Contact Author)

Texas A&M University ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Sheryl B. Ball

Virginia Polytechnic Institute & State University - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

Philip J. Grossman

Monash University - Department of Economics ( email )

Wellington Road
Clayton, 3800
Australia
61399020052 (Phone)

William R. Zame

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States
310-206-9463 (Phone)

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