Market Experiment Results.1

Market Experiment Results.1 - 2 quantity increments of 10....

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Vernon L. Smith, “An Experimental Study of Competitive Market Behavior,” Journal of 1 Political Economy, Vol. 70, No. 2 (April 1962), 111-137. Available through course EReserves. A buyer with reservation price 0.75 was absent. 2 Market Experiment Results Our first experiment was a simple test of market equilibrium. The experiment was designed to replicate test 1 of Vernon Smith’s seminal paper. The reservation prices for buyers were {3.25, 1 3.00, 2.75, 2.50, 2.25, 2.00, 1.75, 1.50, 1.25, 1.00} and the reservation prices for sellers were {0.75, 1.00, 1.25, 1.50, 1.75, 2.00, 2.25, 2.50, 2.75, 3.00, 3.25}. Transactions took place in
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Unformatted text preview: 2 quantity increments of 10. The supply and demand schedules intersect at a theoretical equilibrium price of $2.00 and quantity of 60. In all four rounds (periods), the theoretically correct number of transactions were completed: quantity exchanged was 60. The prices of each transaction in order of occurrence were: Round 1 Round 2 Round 3 Round 4 2.15 2.35 2.00 2.10 2.60 2.20 2.20 2.12 2.55 2.25 2.15 2.00 2.60 2.20 2.12 2.10 1.45 2.10 2.05 2.05 2.00 1.90 2.10 1.70 Average 2.23 2.17 2.10 2.01...
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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