| Concurrent Trading in Two Experimental Markets with Demand Interdependence (2007) | |||||||||||||||
Abstract | |||||||||||||||
| Summary. We report results from fteen computerized double auctions with concurrent trading of two commodities. In contrast to prior experimental markets, buyers ' demands are induced via CES earnings functions de ned over the two traded goods, with a at money expenditure constraint. Sellers receive independent marginal cost arrays for each commodity. Parameters for buyers ' earnings functions and sellers ' costs are set to yield a stable, competitive equilibrium. In spite of the complexity introduced by the demand interdependence, the competitive model is a good predictor of market outcomes, although prices tend to be above (below) the competitive prediction in the low-price (high-price) market. | |||||||||||||||
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