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Marshallian vs. Walrasian Stability in an Experimental Market

Plott, Charles R. and George, Glen (1992) Marshallian vs. Walrasian Stability in an Experimental Market. Economic Journal, 102 (412). pp. 437-460. ISSN 0013-0133. doi:10.2307/2234284.

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The experiments discussed below are an attempt to examine concepts of stability as found in economic textbooks. Two concepts of stability, which stem from two different concepts of market adjustment, seem to have dominated thinking. Whilst these two concepts are typically called Walras stability and Marshall stability, some controversy exists over the extent to which these two models represent their respective thinking. No doubt the current formal statements of the theories reflect an evolution of the ideas through the work of many theorists. The terminology is retained for convenience. Regardless of their origins, these two concepts lead to competing hypotheses about the conditions under which market instability will be observed so the subject is a natural one for experimental investigation. Furthermore, since this is the first experimental examination of the stability of equilibria, the strategy is to inquire about stability in the context of these two classical models and to avoid the temptation to attempt to extend them or integrate them with more modern theory. The old models have not been checked. They seem to be an appropriate place to start.

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Additional Information:© 1992 Published by Wiley on behalf of the Royal Economic Society. The financial support of the National Science Foundation is gratefully acknowledged as well as support from the California Institute of Technology Laboratory for Experimental Economics and Political Science. This project was first assigned as a project in an experimental economics class. Stephen Pitts contributed significantly to the development of instructions and to finding parameters of the continuous model that yielded acceptable integer solutions. The comments of John Ledyard and Jeffrey Dubin influenced the experimental design and data analysis. Comments by Gary Becker and Eskander Alvi were useful in helping us understand the theories and the literature. Special thanks go to Jessica Goodfellow for her help as a research assistant.
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Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
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Social Science Working Paper683
Issue or Number:412
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Official Citation:Marshallian Vs. Walrasian Stability in an Experimental Market Charles R. Plott and Glen George The Economic Journal , Vol. 102, No. 412 (May, 1992) , pp. 437-460 Published by: Wiley on behalf of the Royal Economic Society Article DOI: 10.2307/2234284 Article Stable URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44114
Deposited On:04 Mar 2014 16:17
Last Modified:10 Nov 2021 16:47

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