Anderson, Christopher M. and Plott, Charles R. and Shimomura, Ken-Ichi and Granat, Sander (2004) Global instability in experimental general equilibrium: the Scarf example. Journal of Economic Theory, 115 (2). pp. 209-249. ISSN 0022-0531. doi:10.1016/S0022-0531(03)00185-6. https://resolver.caltech.edu/CaltechAUTHORS:20140220-140231241
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Abstract
Scarf (Int. Econ. Rev. 1 (1960) 157) proposed a model of dynamic adjustment in which the standard tatonnement price adjustment process orbits around, rather than converges to, the competitive equilibrium. Hirota (Int. Econ. Rev. 22 (1981) 461) characterized the price paths. We explore the predictions of Scarf's model in a non-tatonnement experimental double auction. The average transaction prices in each period do follow the path predicted by the Scarf and Hirota models. When the model predicts convergence the data converge; when the model predicts orbits, the data orbit in the direction predicted by the model. Moreover, we observe a weak tendency for prices within a period to follow the path predicted by the model.
| Item Type: | Article | ||||||||||||
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| Additional Information: | © 2003 Elsevier Inc. Received 25 October 2002; final version received 13 March 2003. The financial support of the National Science Foundation and the Caltech Laboratory for Experimental Economics and Political Science is gratefully acknowledged. Funding support for Shimomura was provided by the Kyoto Center for the Study of Complex Economic Systems supported by Japan MEXT and the Japanese Bankers Association Foundation. Mason Porter and Daniel Song contributed to the early stages of the research. Helpful comments were received from Mahmoud El-Gamal, David Grether, Masayoshi Hirota, Anjan Mukherji, Daniel Rowe and Herbert Scarf. | ||||||||||||
| Group: | Social Science Working Papers | ||||||||||||
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| Subject Keywords: | general equilibrium, stability, experiments | ||||||||||||
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| Issue or Number: | 2 | ||||||||||||
| Classification Code: | JEL: D50; C92; E3 | ||||||||||||
| DOI: | 10.1016/S0022-0531(03)00185-6 | ||||||||||||
| Record Number: | CaltechAUTHORS:20140220-140231241 | ||||||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20140220-140231241 | ||||||||||||
| Official Citation: | Christopher M. Anderson, Charles R. Plott, Ken-Ichi Shimomura, Sander Granat, Global instability in experimental general equilibrium: the Scarf example, Journal of Economic Theory, Volume 115, Issue 2, April 2004, Pages 209-249, ISSN 0022-0531, http://dx.doi.org/10.1016/S0022-0531(03)00185-6. (http://www.sciencedirect.com/science/article/pii/S0022053103001856) | ||||||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | ||||||||||||
| ID Code: | 43911 | ||||||||||||
| Collection: | CaltechAUTHORS | ||||||||||||
| Deposited By: | INVALID USER | ||||||||||||
| Deposited On: | 20 Feb 2014 22:50 | ||||||||||||
| Last Modified: | 10 Nov 2021 16:45 |
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