A Market-Clearing Classroom Experiment
This paper describes a classroom experiment demonstrating the price mechanism and the clearing of markets in an endowment economy. Participants receive random endowments of two goods they may trade in order to maximize a given utility function. A market-clearing price is reached when no mutually beneficial trades are possible. The outcome is truly endogenous, with no reservation prices or willingness to trade imposed on the participants. A problem set allows the participants to study the equilibrium outcome analytically. The experiment can be used in intermediate micro- and macroeconomic courses.
Year of publication: |
2002
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Authors: | Bohácek, Radim |
Published in: |
Southern Economic Journal. - Southern Economic Association - SEA. - Vol. 69.2002, 1, p. 189-194
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Publisher: |
Southern Economic Association - SEA |
Saved in:
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