Insights from Experimental Economics for Market Regulation
We present selected results in experimental economics with relevance for market regulation and derive from them concrete insights that could be interesting for regulating authorities. For those readers that are new to experimental economics, the purposes and advantages of economic experiments are discussed and the experimental double-auction market is described in detail to serve as a benchmark example. The experimental results regarding three potential sources of market failure are then outlined: market power, asymmetric information, and externalities. Furthermore, experimental test-bedding, a promising technique for market regulators to examine a new market design ex-ante, is discussed. One important contribution of experimental economics we would like to stress is that the market institution is more important for market outcomes than economic theory has recognized so far.
Volume (Year): XLIX (2004)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: Naamsestraat 69, 3000 Leuven|
Web page: http://feb.kuleuven.be/rebel
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ete:revbec:20040202. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB)
If references are entirely missing, you can add them using this form.