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An Experimental Examination of the Simultaneous Determination of Input Prices and Output Prices

Goodfellow, Jessica and Plott, Charles R. (1990) An Experimental Examination of the Simultaneous Determination of Input Prices and Output Prices. Southern Economic Journal, 56 (4). pp. 969-983. ISSN 0038-4038. https://resolver.caltech.edu/CaltechAUTHORS:20140303-144744431

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Abstract

This paper involves a test of the competitive equilibrium as a model of the interdependence that exists between input and output markets. The test was motivated by the questions of skeptical students who were just learning the details of the competitive model. It was also motivated as a natural extension of existing results. In essence, the interdependence between input and output markets has been observed in several laboratory studies in which arbitrage could occur in markets separated by space or by time [6, 599-624; 5; 8, 1063-1071; 3, 223-241; 1, 537-567; 2, 955- 981; 7, 106-127; 9, 1-33]. Goods acquired by an arbitrager or by a speculator can be viewed as inputs taken from one market and then when sold by the same agent in a spatially separated or a temporarily separated market, they can be viewed as outputs resulting from a simple production process. Thus, all experiments in which such market activity exists can be viewed as having involved production. However, in all cases studied to date the market interdependence was rather transparent and the production technology was linear. In this study, the problem posed for the multiple markets is not transparent and the technology is nonlinear.


Item Type:Article
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http://www.jstor.org/stable/1059885OrganizationJSTOR Article
Additional Information:© 1990 Southern Economic Association. The financial support of The National Science Foundation is gratefully acknowledged.
Group:Social Science Working Papers
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Social Science Working Paper691
Issue or Number:4
Record Number:CaltechAUTHORS:20140303-144744431
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140303-144744431
Official Citation:An Experimental Examination of the Simultaneous Determination of Input Prices and Output Prices Jessica Goodfellow and Charles R. Plott Southern Economic Journal , Vol. 56, No. 4 (Apr., 1990) , pp. 969-983 Published by: Southern Economic Association Article DOI: 10.2307/1059885 Article Stable URL: http://www.jstor.org/stable/1059885
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44103
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:04 Mar 2014 18:04
Last Modified:03 Oct 2019 06:14

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