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Principles of Continuous Price Determination In An Experimental Environment With Flows Of Random Arrivals And Departures

Plott, Charles R. and Alton, Michael R. (2007) Principles of Continuous Price Determination In An Experimental Environment With Flows Of Random Arrivals And Departures. Social Science working Paper, 1276. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20140317-145139816

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Abstract

A new experimental market environment is developed. Continuously arriving incentives replace the traditional period structure. The issue posed is whether classical principles of market behavior apply when the environment is constantly changing. Three broad results emerge. (1) Natural “flow” generalizations of the laws of demand and supply exist and dictate much of the market behavior. (2) Two different classes of laws operate: the “temporal equilibrium”, which is based on the parameters that exist in the market at a moment and the “flow competitive equilibrium,” which reflects the probabilistic structure of the parameters. (3) The markets exhibit extraordinarily high levels of efficiency.


Item Type:Report or Paper (Working Paper)
Additional Information:The authors wish to express their appreciation for the help of Roger Sherman, Kim Border, Peter Bossaerts, David Grether, and the participants in the Caltech seminar on experimental economics. The financial support of the Caltech Laboratory of Experimental Economics and Political Science and Caltech’s Lee Center for Advanced Networking is gratefully acknowledged.
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
Laboratory of Experimental Economics and Political ScienceUNSPECIFIED
Lee Center for Advanced Networking, CaltechUNSPECIFIED
Subject Keywords:equilibrium, experiment, price determination, continuous market, value, complex markets, dynamic adjustment
Record Number:CaltechAUTHORS:20140317-145139816
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20140317-145139816
Official Citation:Plott, Charles R. and Alton, Michael R. Principles of Continuous Price Determination In An Experimental Environment With Flows Of Random Arrivals And Departures. Pasadena, CA: California Institute of Technology, 2007. Social Science Working Paper, 1256.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44364
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:27 Mar 2014 21:44
Last Modified:02 Nov 2017 21:21

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