| Center for Experimental Business Research is gratefully acknowledged (1891) | |||||||||||||||
Abstract | |||||||||||||||
| In a seminal series of papers 1, Gode and Sunder[1993,b,1996] have explored the relationship between limited rationality, market institutions and the general equilibration of markets to the competitive equilibrium. Their fundamental discovery is that within the classical double auction market institution only the weakest elements of rationality need to be present for markets to exhibit high allocative efficiency and price convergence. While Gode and Sunder place more emphasis on allocative efficiency 2 than on price convergence, the apparent price convergence increases the agreement between their simulation results and observed price convergence in single isolated periods of double auction markets with humans 3. Their ‘Zero Intelligence ’ [ZI] agents, are governed | |||||||||||||||
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