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An Experimental Examination of the Walrasian Tatonnement Mechanism

Bronfman, Corinne and McCabe, Kevin and Porter, David and Rassenti, Stephen and Smith, Vernon L. (1992) An Experimental Examination of the Walrasian Tatonnement Mechanism. Social Science Working Paper, 824. California Institute of Technology , Pasadena, CA. (Unpublished)

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Joyce (1984) reports results of experiments of a Walrasian tatonnement auction that show that the mechanism is stable, exhibits strong convergence properties and generates efficiency averaging better than 97%. He also found that when subjects could see part of the order flow (excess demand), price tended to be lower (favorable to buyers). His experiments consisted of a stationary environment where subjects were provided with single-unit supply and demand functions. This paper assesses the robustness of his results in a more complex setting and systematically investigates the effect of various order flow information and message restriction rules on the performance of the Walrasian mechanism. In particular, our subjects were provided with multi-unit demands and supplies where equilibrium price and subject values or costs were changed each trading period.

Item Type:Report or Paper (Working Paper)
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Additional Information:Published as Bronfman, Corinne, Kevin McCabe, David Porter, Stephen Rassenti, and Vernon Smith. "An experimental examination of the Walrasian tâtonnement mechanism." The RAND journal of Economics (1996): 681-699.
Group:Social Science Working Papers
Subject Keywords:Prices, Auctions, Market prices, Supply and demand, Supply, Order flow, Business orders, Price level changes, Nash equilibrium, Equilibrium prices
Series Name:Social Science Working Paper
Issue or Number:824
Record Number:CaltechAUTHORS:20170828-135118421
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80854
Deposited By: Jacquelyn Bussone
Deposited On:28 Aug 2017 21:00
Last Modified:03 Oct 2019 18:35

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