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- Title
Concurrent trading in two experimental markets with demand interdependence.
- Authors
Williams, Arlington W.; Smith, Vernon L.; Ledyard, John O.; Gjerstad, Steven
- Abstract
Summary. We report results from fifteen computerized double auctions with concurrent trading of two commodities. In contrast to prior experimental markets, buyers' demands are induced via CES earnings functions defined over the two traded goods, with a fiat money expenditure constraint. Sellers receive independent marginal cost arrays for each commodity. Parameters for buyers' earnings functions and sellers' costs are set to yield a stable, competitive equilibrium. In spite of the complexity introduced by the demand interdependence, the competitive model is a good predictor of market outcomes, although prices tend to be above (below) the competitive prediction in the low-price (high-price) market.
- Subjects
AUCTIONS; COMMERCIAL products; ECONOMIC equilibrium; PRICES
- Publication
Economic Theory, 2000, Vol 16, Issue 3, p511
- ISSN
0938-2259
- Publication type
Article