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From Non Market Attitudes to Market Behavior: Laboratory Market Experiments in Moscow, and the Hvatat Property of Human Behavior

Menshikov, Ivan and Menshikova, Olga and Myagkov, Mikhail and Plott, Charles R. (1998) From Non Market Attitudes to Market Behavior: Laboratory Market Experiments in Moscow, and the Hvatat Property of Human Behavior. Social Science Working Paper, 987. California Insitutute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20140320-165915758

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Abstract

This paper reports on laboratory market experiments that were conducted in Moscow during the fall of 1992. Two broad concerns guided the design of the experiments. The first concern is the obvious cultural differences between people in Russia and those in the west where traditional laboratory market experiments have been conducted. Most economists who have conducted experiments would assume that cultural background would not play a major part in the equilibration process, and that the law of supply and demand would operate essentially the same in all cultures and at all times. As Russia is undergoing a dramatic social change and before an orientation to market attitudes permeates the society, a unique opportunity presented itself to test this assumption about the universal nature of the laws of the market. In the language of the experimenters, this first concern is whether or not some of the known properties of markets that operate in western culture are robust to major changes in the culture of the subject population. The properties of markets that are of interest are the fact of equilibration, the influence of price ceilings on equilibration and the influence of the asymmetries in the shapes of the demand and supply curves on the direction of convergence to equilibrium. The second concern reflects a desire to explore some more recently discovered aspects of market behavior. A transactions cost was added to the market and the question posed was whether or not the cost frustrated or biased equilibration (Jamison and Plott, 1997). The results of the experiments were not as anticipated. The standard convergence process was observed but when the data were applied to test the asymmetric rent hypothesis or the hypothesis regarding the nonbinding price controls, some surprises surfaced. In particular the data were not the same as had been observed in other experiments. This paradoxical failure of previous results to generalize prompted a detailed investigation into the behavior of individuals in the experiments. The hope was to find the causes of the discrepancies. A special section of the paper is devoted to a conjecture that resulted from the ex-post examination of the data and is offered as an explanation. The paper is organized as follows. In the first section the purposes of the project are outlined in greater detail. The second section contains the experimental design, procedures and parameters. The third section contains the predictions of alternative models as applied to the special case of the parameters of the experiments. The fourth section contains the results of the experiments. The fifth section contains the post experiment speculations about the possible explanations of the surprising dynamic behavior. Here the idea of Hvatat, which means "to grab" in Russian, is introduced and explored. The final section is a summary of conclusions.


Item Type:Report or Paper (Working Paper)
Additional Information:The financial support of the Caltech Laboratory of Experimental Economics and Political Science and of the National Science Foundation is gratefully acknowledged. We also want to thank John Patty for his helpful comments.
Group:Social Science Working Papers
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Funding AgencyGrant Number
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
National Science FoundationUNSPECIFIED
Record Number:CaltechAUTHORS:20140320-165915758
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20140320-165915758
Official Citation:Plott, Charles R. and Menshikov, Ivan and Menshikova, Olga and Myagkov, Mikhail. From Non Market Attitudes to Market Behavior: Laboratory Market Experiments in Moscow, and the Hvatat Property of Human Behavior. Pasadena, CA: California Institute of Technology, 1998. Social Science Working Paper, 987.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:44438
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:28 Mar 2014 18:40
Last Modified:28 Mar 2014 18:40

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