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Market Experiment Results.4

Market Experiment Results.4 - as the second experiment The...

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Buyers with reservation prices 0.75, 1.00, and 1.75 were absent. 5 The average price in round 2 was a little low, but otherwise the average prices were right on the mark at or very near 2.25. Predicted total surplus (sum of buyer’s surpluses and seller’s surpluses) over all four rounds was 200; actual surplus was 200 so fully efficient! Some buyers and sellers did a bit better or worse than predicted in terms of their own surplus, but it all netted out. Our third experiment was a price ceiling at $2.00, under the same demand and supply conditions
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Unformatted text preview: as the second experiment. The reservation prices for buyers were {3.25, 3.00, 2.75, 2.50, 2.25, 2.00, 1.50, 1.25} and the reservation prices for sellers were {1.25, 1.50, 1.75, 2.00, 2.25, 2.50, 2.75, 3.00, 3.25, 3.50, 3.75}. With a price ceiling of $2.00, theory says only a quantity of 40 5 should be exchanged. Quantity demanded should be 60, while quantity supplied should be 40, so there should be excess demand of 20....
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