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The work of Friedrich Von Hayek contains several testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek Hypothesis': equilibrium prices and the gains from trade can be achieved in the presence of diffuse, decentralized information, and in...
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buyers may not be able to trade. Theory predicts very different equilibrium outcomes when we vary the set-up along these two …
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) is a random variable governed by a Markov Process whose structure is common knowledge. At the beginning of each period …
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find that knowledge of trades, along with price, improves the coordination and bargaining position of buyers. Trade prices …
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