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Purchases by government agencies from private sector firms are often initiated by solicitation of bids to supply the desired items. Payment to the firm that is awarded the supply contract may be determined by (a) the bid price or (b) bid price plus a share of the difference between observable...
Persistent link: https://www.econbiz.de/10014023576
This chapter focuses on laboratory experimental examinations of a particular class of institutions, policies or mechanisms of monopoly control. These are mechanisms which take the existence of a monopoly as a given and ask how might the abuses of monopoly be controlled in a decentralized manner....
Persistent link: https://www.econbiz.de/10014023628
Experiments with human subjects have been widely used to test hypotheses derived from economic theory and to provide stylized facts about empirical regularities in economics. One of the clear implications of experimental economics is that the efficiency and distributional properties of market...
Persistent link: https://www.econbiz.de/10014023533
Study of preference reversals originated with cognitive psychologists and has spread to experimental economics because it is directly relevant to the empirical validity of economic theories of decision-making under uncertainty. A preference reversal experiment involves paired choice and...
Persistent link: https://www.econbiz.de/10014023543
A testable form of the utility hypothesis results from identifying necessary condition(s) for the existence of a utility function that rationalizes the price and quantity data, meaning a utility function that correctly predicts choices that do not violate an agent's budget constraint. Possible...
Persistent link: https://www.econbiz.de/10014023544
This chapter is concerned with laboratory tests of job search models. Formal models of job search specify certain common elements, i.e., the length of the search horizon, the searcher's discounting rate of interest, the net costs (subsidies) to search in each period of the search horizon, and...
Persistent link: https://www.econbiz.de/10014023611
The first price sealed bid auction is the market institution in which the high bidder acquires ownership of the auctioned item and pays a price equal to the amount of the highest bid. This market institution is distinguished from the second price sealed bid auction in which the high bidder...
Persistent link: https://www.econbiz.de/10014023636
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...
Persistent link: https://www.econbiz.de/10014023572
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...
Persistent link: https://www.econbiz.de/10014023603
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...
Persistent link: https://www.econbiz.de/10014023604