Resale-proof Trades of Data under Budget Constraints: A Subject Experiment

In a simple model of the market for transactions of data proposed by [9], this note examines the effects of budget constraints on the prices of data and the gains from trades of data produced with their constituent variables in a subject experiment. In the model, the prices of variables are exogenously set at the initial round, and then updated for the next round immediately according to the demand for the data traded in the current round. Data are traded freely among agents and the prices are determined through transactions among agents. Resale of data is permitted among agents. The initial prices of variables are computed assuming the results of sequential trades of data. Each subject was faced with budget constraints, but surplus budgets cannot be carried over to subsequent rounds. In the subject experiment, the prices of variables fluctuated, but the prices of data determined by the initial owners under budget constraints remained relatively stable without a drastic increase compared with the prices of data determined under no budget constraints. The efficiency rates in transactions made under budget constraints were not lower than those in transactions made under no budget constraints.