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The effect of two trading institutions on price expectations and the stability of supply-response lag markets

Johnson, Michael D. and Plott, Charles R. (1989) The effect of two trading institutions on price expectations and the stability of supply-response lag markets. Journal of Economic Psychology, 10 (2). pp. 189-216. ISSN 0167-4870. http://resolver.caltech.edu/CaltechAUTHORS:20140303-145304093

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Abstract

A series of four experimental markets are described which examine the effect that different trading institutions have on sellers' price expectations and market behavior. The results suggest that when sellers trade in information rich auction markets, their price expectations are relatively complex and adaptive. When sellers trade in more information poor posted price markets, their expectations are relatively simple and extrapolative. This difference in the complexity of expectations is reflected in the stability of the markets, the auction markets being more stable than the posted price markets. Overall, the study supports the notion that trading institutions contribute to the observed complexity of price expectations.


Item Type:Article
Related URLs:
URLURL TypeDescription
http://dx.doi.org/10.1016/0167-4870(89)90019-6DOIArticle
http://www.sciencedirect.com/science/article/pii/0167487089900196PublisherArticle
Additional Information:© 1989 Elsevier Science Publishers B.V. (North-Holland). Received March 29, 1988; accepted February 20, 1989.
Record Number:CaltechAUTHORS:20140303-145304093
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20140303-145304093
Official Citation:Michael D. Johnson, Charles R. Plott, The effect of two trading institutions on price expectations and the stability of supply-response lag markets, Journal of Economic Psychology, Volume 10, Issue 2, June 1989, Pages 189-216, ISSN 0167-4870, http://dx.doi.org/10.1016/0167-4870(89)90019-6. (http://www.sciencedirect.com/science/article/pii/0167487089900196)
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ID Code:44104
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:04 Mar 2014 16:51
Last Modified:30 Apr 2014 22:57

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