An experimental comparison of two search models

We report an experiment designed to investigate markets with consumer searc h costs. In markets where buyers are matched with one seller at a time, sel lers are predicted to sell at prices equal to buyers' valuations. However, we find sellers post prices that offer a more equal division of the surplus , and these prices tend to be accepted, while prices closer to the equilibr ium prediction are rejected. At the ether extreme, sellers are predicted to sell at a price equal to marginal cost when buyers are matched with two se llers at a time. Here, we find prices are closer to, but still significantl y different from, the equilibrium prediction. Thus, our results support the oretical comparative static, but not point, predictions.