An Agent Based Model of Switching: The Case of Boulogne S/mer Fish Market
The question of efficiency of market organization is an important one in economics. When theoretical results suggest the dominance of auctions, empirical studies present more mitigated results putting forward that the global efficiency depends on agents' characteristics and market environment. The Boulogne s/mer fish market is organized in a particular way. Both buyers and sellers can daily choose to exchange through an auction mechanism or through a negotiated one. First empirical results reveal that, at a macro level, this organization is a stable one: the negative price- quantity relation is verified, suggesting a global rationality, even if this relation is not verified for all the individuals. At a micro-level, empirical evidence points out that the agents purchase most of the time on one same market (auctions or negotiated) and this market corresponds to the best choice for them, in terms of prices and quantities sold. A second result then suggests that the performance of a mode of organization depends on the characteristics of the traders and on the features of the good sold. Empirical study also reveals that most of the agents regularly switch from one market to the other. To understand the reasons for this switching, we consider this market as a complex system and simulate an agent based model where limited rational individuals are endowed with simple learning rules (noisy or myopic strategies). The auction sub-market plays a benchmark role, the only strategic possibility for sellers is to decide to go (or not) on the negotiated sub-market. A third result is that macro stability results from the aggregate behaviour of limited rational individuals and this, without any need of central coordinator. A fourth result is that agents daily choose their sub-market according to the global quantities sold on the whole market.
Volume (Year): 15 (2012)
Issue (Month): 2 ()
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-31, March.
- repec:cup:cbooks:9780521551847 is not listed on IDEAS
- Alan Kirman & Sonia Moulet & Rainer Schulz, 2008. "Price Discrimination and Customer Behaviour: Empirical Evidence from Marseille," Working Papers halshs-00349036, HAL.
- Chen, Shu-Heng & Lux, Thomas & Marchesi, Michele, 2001.
"Testing for non-linear structure in an artificial financial market,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 46(3), pages 327-342, November.
- Shu-Heng Chen & Thomas Lux & Michele Marchesi, 1999. "Testing for Non-Linear Structure in an Artificial Financial Market," Discussion Paper Serie B 447, University of Bonn, Germany.
- Gallegati, Mauro & Giulioni, Gianfranco & Kirman, Alan & Palestrini, Antonio, 2011.
"What’s that got to do with the price of fish? Buyers behavior on the Ancona fish market,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 80(1), pages 20-33.
- Mauro Gallegati & Gianfranco Giulioni & Alan Kirman & Antonio Palestrini, 2010. "What's that got to do with the price of fish? Buyers behavior on the Ancona fish market," Working Papers halshs-00545129, HAL.
- Carl Chiarella & Giulia Iori, 2002. "A simulation analysis of the microstructure of double auction markets," Quantitative Finance, Taylor & Francis Journals, vol. 2(5), pages 346-353.
- Gode, Dhananjay K & Sunder, Shyam, 1993. "Allocative Efficiency of Markets with Zero-Intelligence Traders: Market as a Partial Substitute for Individual Rationality," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 119-37, February.
- Viswanathan, S. & Wang, James J. D., 2002. "Market architecture: limit-order books versus dealership markets," Journal of Financial Markets, Elsevier, vol. 5(2), pages 127-167, April.
- G. Tedeschi & G. Iori & M. Gallegati, 2009. "The role of communication and imitation in limit order markets," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 71(4), pages 489-497, October.
- Vignes A. & Etienne J-M, 2009. "Can an exchange market be studied as a buyer-seller network? The case of the Marseille fish market," Working Papers ERMES 0913, ERMES, University Paris 2.
- Hiroshi Takahashi & Takao Terano, 2003. "Agent-Based Approach to Investors? Behavior and Asset Price Fluctuation in Financial Markets," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 6(3), pages 3.
- Gode, Dhananjay K & Sunder, Shyam, 1997. "What Makes Markets Allocationally Efficient?," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 603-30, May.
- Gerard Weisbuch & Alan Kirman & Dorothea Herreiner, 1995.
95-11-102, Santa Fe Institute.
- Bottazzi, Giulio & Dosi, Giovanni & Rebesco, Igor, 2005. "Institutional architectures and behavioral ecologies in the dynamics of financial markets," Journal of Mathematical Economics, Elsevier, vol. 41(1-2), pages 197-228, February.
- Grandmont, Jean-Michel, 1987.
"Distributions of Preferences and the 'Law of Demand.',"
Econometric Society, vol. 55(1), pages 155-61, January.
- Jean-Michel Grandmont, 1984. "Distribution of Preferences and the 'Law of Demand'," Working papers 356, Massachusetts Institute of Technology (MIT), Department of Economics.
- Grandmont Jean-michel, 1985. "Distributions of preferences and the "law of demand"," CEPREMAP Working Papers (Couverture Orange) 8513, CEPREMAP.
- Tedeschi, Gabriele & Gallegati, Mauro & Mignot, Sylvain & Vignes, Annick, 2012. "Lost in transactions: The case of the Boulogne s/mer fish market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(4), pages 1400-1407.
- repec:cup:cbooks:9780521536721 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:jas:jasssj:2011-42-2. 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: (Flaminio Squazzoni)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.