Experimentalists have been so sure of the incentive compatibility of this mechanism in practice that they often explicitly inform their subjects that it is in the respondents' interest to report their true reservation prices, or words to that effect. However, as is reported here, it turns out...

Preference reversal (PR) means that an individual's choice a direct reflection of his preferences between two options is inconsistent with the ranking of his (selling) reservation prices an indirect reflection of his preferences. Such choice/reservation-price inconsistency is potential...

A large group of experimentalists have analyzed the nature of free riding in the context of so-called public exchanges, a laboratory device for investigating the consequences of various aspects of non-rivalry in consumption related to voluntary public goods. However, there have been few attempts...

Although certain government policies might be tested in controlled experiments during a pilot phase, such tests are rarely undertaken. Ideally, a policy could be tried, when feasible and meaningful, on a random subset of areas, firms or consumers exposed to the policy and be compared with the...

A subset of the world's countries may wish to commit themselves to stringent emission targets in an attempt to influence other countries to follow suit, thereby bringing about a significant reduction in the threat to the global climate. Moreover, if the pioneering countries were to connect a...

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...