Market Experiment Results.5

Market Experiment Results.5 - The prices of each...

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We want to know whether quantity falls to the correct degree. We also want to see which buyers are dissatisfied due to excess demand. Does the market succeed in allocating the 40 gallons to the buyers who value them most? Are the buyers with higher reservation prices more successful in completing a transaction than those with lower valuations? In all eight rounds, the theoretically correct number of transactions were completed: quantity exchanged was 40.
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Unformatted text preview: The prices of each transaction in order of occurrence were: Round 1 Round 2 Rounds 3-8 2.00 1.95 2.00 2.00 2.00 2.00 1.95 2.00 2.00 1.90 2.00 2.00 Average 1.96 1.99 2.00 All but three of the 32 transactions occurred at the price ceiling of $2.00. The three lower prices of $1.95, $1.90 and $1.95 took place early: they were the third, fourth and fifth transactions overall. The outcome quickly converged on the predicted price....
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