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Edgeworth exchange is the fundamental general equilibrium model, yet equilibrium predications and theories of price adjustment for this model remain untested. This paper reports an experimental test of Edgeworth exchange which demonstrates that prices and allocations converge sharply to the...
Persistent link: https://www.econbiz.de/10005077054
experiments. These automata play against each other in computer tournaments. The risk neutral subgame perfect Nash equilibrium …
Persistent link: https://www.econbiz.de/10005124959
Many rent-sharing decisions in a society result from a bargaining process between groups of individuals (such as between the executive and the legislative branches of government, between legislative factions, between corporate management and shareholders, etc.). We conduct a laboratory study of...
Persistent link: https://www.econbiz.de/10005125563
Landberger et al. (2001) identified optimal bidder behavior in first- price private-value auctions when the ranking of valuations is common knowledge, and derived comparative-statics predictions regarding the auctioneer’s expected revenue and the efficiency of the allocation. The experiment...
Persistent link: https://www.econbiz.de/10005134975
We examine theoretically and experimentally two countervailing effects of collusion and symmetric mergers among bidders. On one hand, the pooling of information within bidding rings increases the precision of competing estimates. We demonstrate that, in average value auctions, this leads to more...
Persistent link: https://www.econbiz.de/10005407619
This paper evaluates performance of human subjects and instances of a bidding model that interact in continuous ­time double auction experiments. Asks submitted by instances of the seller model (``automated sellers'') maximize the seller's expected surplus relative to a heuristic belief...
Persistent link: https://www.econbiz.de/10005413252
Many rent-sharing decisions in a society result from a bargaining process between groups of individuals (such as between the executive and the legislative branches of government, between legislative factions, between corporate management and shareholders, etc.). We conduct a laboratory study of...
Persistent link: https://www.econbiz.de/10005413287
This article reports the results of a market experiment designed to test the predictions of the constant relative risk … information feedback, the data support the risk neutral Nash equilibrium prediction; with price information feedback, on the other … hand, subjects overbid the risk neutral Nash equilibrium significantly. The constant relative risk aversion model is …
Persistent link: https://www.econbiz.de/10005556692
We construct Edgeworth exchange economies equivalent to demand and supply environments typically used in bargaining models and market experiments. This formulation clearly delineates environment, institution, and behavior for these models and experiments. To illustrate, we examine results by...
Persistent link: https://www.econbiz.de/10005561849
Economic theory predicts that in a first-price auction with equal and observable valuations, bidders earn zero profits. Theory also predicts that if valuations are not common knowledge, then since it is weakly dominated to bid your valuation, bidders will bid less and earn positive profits....
Persistent link: https://www.econbiz.de/10005125581