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Properties of Disequilibrium Adjustment in Double Auction Markets

Plott, Charles R. (2008) Properties of Disequilibrium Adjustment in Double Auction Markets. In: Handbook of Experimental Economics Results. Vol.1. Elsevier , Amsterdam, pp. 16-21. ISBN 9780444826428. https://resolver.caltech.edu/CaltechAUTHORS:20140317-150607036

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Abstract

The tendency of double auction markets to converge to the equilibrium of the associated competitive equilibrium model is well known, but the equilibration process is not understood. The reason for adjustment and the processes that are actively involved with the adjustment process are still a mystery. However, the study of many market reported over the years by many different research groups have provided some properties of disequilibria and the dynamics of the adjustment process. Double auction markets have properties that are closely associated with certain institutional and environmental features and have been studied extensively. First, there is a period structure to the markets: an open and a close. Second, major changes, such as parameter changes, occur between the close of one period and the open of the next and this fact is public information. That is, parameter changes do not occur during a period. Third, the commodity traded is like a service that does not have a life of over one period. Redemption values and costs are active for only one period at a time. If the commodity does have a time life- like a security - it will systematically change its value between periods, such as a dividend that is paid at the end of a period. While the discussion that follows does not specifically explore the dynamic of adjustment that occur in other market structures, the properties listed below are characteristic of the asset market that have been studied: speculative markets, and economies characterized by overlapping generation.


Item Type:Book Section
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http://dx.doi.org/10.1016/S1574-0722(07)00001-7DOIUNSPECIFIED
http://www.sciencedirect.com/science/article/pii/S1574072207000017PublisherUNSPECIFIED
Additional Information:© 2008 Elsevier B.V.
Record Number:CaltechAUTHORS:20140317-150607036
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20140317-150607036
Official Citation:Charles R. Plott, Chapter 1 Properties of Disequilibrium Adjustment in Double Auction Markets, In: Charles R. Plott and Vernon L. Smith, Editor(s), Handbook of Experimental Economics Results, Elsevier, 2008, Volume 1, Pages 16-21, ISSN 1574-0722, ISBN 9780444826428, http://dx.doi.org/10.1016/S1574-0722(07)00001-7. (http://www.sciencedirect.com/science/article/pii/S1574072207000017)
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44366
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:18 Mar 2014 21:23
Last Modified:03 Oct 2019 06:17

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