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Published September 5, 2017 | Submitted
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Marshallian VS. Walrasian Stability in an Experimental Market

Abstract

Twelve markets were studied. All markets had downward sloping supply functions created by Marshallian-type external economics. The conditions were such that the Marshallian theory of dynamics gave predictions opposite to the Walrasian theory of dynamics. The market organizations studied were double auction, sealed bid/offer and (secant) t√Ętonnement. In all cases the Marshallian theory of dynamics was the better model.

Additional Information

The financial support of the National Science Foundation is gratefully acknowledged as well as support from the California Institute of Technology Laboratory for Experimental Economics and Political Science. This project was first assigned as a project in an experimental economics class. Stephen Pitts contributed significantly to the development of instructions and to finding parameters of the continuous model that yielded acceptable integer solutions. The comments of John Ledyard and Jeffrey Dubin influenced the experimental design and data analysis. Comments by Gary Becker and Eskander Alvi were useful in helping us understand the theories and the literature. Special thanks go to Jessica Goodfellow for her help as a research assistant. Published as lott, Charles R. and George, Glen (1992) Marshallian vs. Walrasian Stability in an Experimental Market. Economic Journal, 102 (412). pp. 437-460.

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Created:
August 19, 2023
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August 19, 2023