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Theories of Price Formation and Exchange in Double Oral Auctions

Easley, David and Ledyard, John O. (1986) Theories of Price Formation and Exchange in Double Oral Auctions. Social Science Working Paper, 611. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20170913-133503410

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Abstract

We provide a theory to explain the data generated by Double Oral Auctions. The primary conclusion suggested by Double Oral Auction experiments is that the quantities exchanged and the prices at which transactions take place converge to, or near to, the values predicted by the competitive equilibrium model. Our theory predicts convergence to the competitive equilibrium and provides an explanation of disequilibrium behavior. The predictions of our theory fit the data better than do the predictions of Walrasian, Marshallian or game theoretic models.


Item Type:Report or Paper (Discussion Paper)
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http://resolver.caltech.edu/CaltechAUTHORS:20171110-151818390Related ItemPublished Version
Additional Information:Revised. Original dated to March 1981. This paper benefited from discussions in seminars at Cornell, Northwestern, Stonybrook, and an NSF Conference on Experimental Economics at the University of Arizona. This version is significantly different from earlier versions. We would like to thank Vernon Smith and Arlington Williams for making data on their Plata DOA experiments available to us. Published as Easley, David, and John Ledyard. "Theories of price formation and exchange in double oral auctions." The double auction market: Institutions, theories, and evidence 15 (1993).
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:611
Record Number:CaltechAUTHORS:20170913-133503410
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170913-133503410
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81417
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:15 Sep 2017 18:21
Last Modified:03 Oct 2019 18:42

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