This chapter focuses on the geometry of how a market can solve systems of equations from market jaws to the newton method. Since market equilibrium can be interpreted as a solution to a system of equations, price discovery, as it called in the language of market makers, can be viewed as having...

In the experiment, subjects have tables at their disposal that indicate the expected future dividend stream, which corresponds to the fundamental value, at any time. Subjects take a quiz on how to read the table before the market opens. Thus the fundamental value of the asset is common knowledge...

This chapter focuses on the process of asset pricing. In field studies, it is customary to reject the random walk theory by identifying drift in prices. The drift is to be explained in terms of compensation for risk using some equilibrium asset pricing model. An alternative would be to view...

This chapter illustrates a mechanism capable of competitively allocating power through an electricity network in which loop flow and the unusual economic phenomenon caused by loop flow are anticipated and integrated into the competitive process. At the base of the complexity is Kirchoff's law...

Theoretically, it is not the case that markets will necessarily equilibrate even when the equilibrium is a unique, interior equilibrium. In his example prices always orbit around the equilibrium and thus never converge. That platform thus provides the starting point of the research. For the...

The experiments reported in this chapter explore the interaction of networks of markets. The issue is whether, and how long, chains of markets separated in time, space and participants might behave. The setting can be interpreted in two different ways. One is a system of vertical markets in...

The fundamental question addressed by this research is the degree to which the classical law of comparative advantage can be observed operating in experimental markets. The law holds that the local economic environments systematically influence, if not completely dictate, patterns of...

The experimental work demonstrates that markets have the capacity to collect information through a process of equilibration and that fact suggests the feasibility of creating a system of markets that have only a purpose of gathering information. The laboratory work suggests that theory and...

First, market prices can exhibit the type of instability predicted by classical dynamic models. Second, the conditions under which instability is observed are not captured by the cobweb model but such conditions are captured by models of the form developed by Marshall and Walras in which the...

The classical discussion of the consequences of non-convexities took a new form as principles of game theory became joined with the structural features of large economies of scale. New models suggest that the threat of competition, as opposed to the existence of an actual competitor, serve to...