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An Experimental Examination of the Walrasian tâtonnement Mechanism

Bronfman, Corinne and McCabe, Kevin and Porter, David and Rassenti, Stephen and Smith, Vernon (1996) An Experimental Examination of the Walrasian tâtonnement Mechanism. RAND Journal of Economics, 27 (4). pp. 681-699. ISSN 0741-6261. http://resolver.caltech.edu/CaltechAUTHORS:20170830-133242316

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Abstract

This is a systematic experimental comparison of the efficiency and competitive properties of a computerized multiunit tâtonnement with or without a dynamic improvement rule, with or without publicity of order flow information. All versions of the tâtonnement are comparatively less efficient than the continuous double auction. The tâtonnement yields competitive prices, but both sides tend to underreveal demand/supply, causing inefficiency. Only the full-information, no-improvement-rule version of the tâtonnement procedure approaches the efficiency of the double auction.


Item Type:Article
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http://www.jstor.org/stable/2555877JSTORArticle
http://resolver.caltech.edu/CaltechAUTHORS:20170828-135118421Related ItemWorking Paper
Additional Information:© 1996 RAND. Published by Wiley on behalf of RAND Corporation.
Subject Keywords:Auctions, Market prices, Supply and demand, Supply, Order flow, Business orders, Price level changes, Nash equilibrium, Equilibrium prices, Excess demand
Record Number:CaltechAUTHORS:20170830-133242316
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20170830-133242316
Official Citation:Bronfman, Corinne, et al. “An Experimental Examination of the Walrasian Tâtonnement Mechanism.” The RAND Journal of Economics, vol. 27, no. 4, 1996, pp. 681–699. JSTOR, www.jstor.org/stable/2555877
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80968
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:30 Aug 2017 20:40
Last Modified:30 Aug 2017 20:40

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