Posted - Offer Markets In Near Continuous Time: an Experimental Investigation
This paper reports an experiment conducted to evaluate a ‘near continuous’ variant of the posted-offer trading institution, where the number of periods in a market session is increased by reducing sharply each period’s maximum length. Experimental results suggest that although decisions in time-truncated periods are not equivalent to periods of longer duration, extensive repetition improves considerably the drawing power of equilibrium predictions in some challenging environments. Nevertheless, significant deviations remain in the near continuous framework. We also observe that the extra data collected in the near continuous framework allows new insights into price convergence and price signaling.
|Date of creation:||Nov 2005|
|Date of revision:||2007|
|Publication status:||Forthcoming in Economic Inquiry|
|Contact details of provider:|| Postal: Box 844000, Richmond, VA 23284-4000|
Web page: http://www.business.vcu.edu/economics
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- Douglas D. Davis & Charles A. Holt, 1996. "Price rigidities and institutional variations in markets with posted prices (*)," Economic Theory, Springer, vol. 9(1), pages 63-80.
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- Michael C. Davis & James D. Hamilton, 2003.
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NBER Working Papers
9741, National Bureau of Economic Research, Inc.
- Davis, Michael C & Hamilton, James D, 2004. "Why Are Prices Sticky? The Dynamics of Wholesale Gasoline Prices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 17-37, February.
- Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-72, March.
- Davis, Douglas D. & Williams, Arlington W., 1997. "The effects of nonstationarities on performance in call markets," Journal of Economic Behavior & Organization, Elsevier, vol. 32(1), pages 39-54, January.
- Deck, Cary A. & Wilson, Bart J., 2008. "Experimental gasoline markets," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 134-149, July.
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