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Theories of Price Formation and Exchange in Double Oral Auctions

2018; Informa; Linguagem: Inglês

10.4324/9780429492532-5

David Easley, John O. Ledyard,

Experimental Behavioral Economics Studies

We provide a theory to explain the data generated by Double Oral Auctions.The primary conclusion suggested by Double Oral Auction experiments is that the quantities exchanged and the prices at which transactions take place converge to, or near to, the values predicted by the competitive equilibrium model.Our theory predicts convergence to the competitive equilibrium and provides an explanation of disequilibrium behavior.The predictions of our theory fit the data better than do the predictions of Walrasian, Marshallian or game theoretic models.