Partial equilibrium mechanism and inter-sectoral coordination: An experiment

This study experimentally evaluates the performance of partial equilibrium mechanisms when different sectors run their separately, despite existence complementarity between them. In our simple laboratory experiment setting that includes two sectors, each sector runs top-trading-cycle mechanism. There is a Pareto-dominant equilibrium, but it requires coordination across sectors. Our results show failure occurs more frequently there asymmetry compared with one-sector benchmark, even without inter-sectoral complementarity. When are sequentially such substantially reduced, they simultaneously.