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Economics Commons

Open Access. Powered by Scholars. Published by Universities.®

Yale University

2007

Strategic market games

Articles 1 - 3 of 3

Full-Text Articles in Economics

An Economy With Personal Currency: Theory And Experimental Evidence, Martin Angerer, Juergen Huber, Martin Shubik, Shyam Sunder Aug 2007

An Economy With Personal Currency: Theory And Experimental Evidence, Martin Angerer, Juergen Huber, Martin Shubik, Shyam Sunder

Cowles Foundation Discussion Papers

Is personal currency issued by participants sufficient to operate an economy efficiently, with no outside or government money? Sahi and Yao (1989) and Sorin (1996) constructed a strategic market game to prove that this is possible. We conduct an experimental game in which each agent issues her personal IOUs, and a costless efficient clearinghouse adjusts the exchange rates among them so the markets always clear. The results suggest that if the information system and clearing are so good as to preclude moral hazard, any form of information asymmetry, and need for trust, the economy operates efficiently at any price level …


Three Minimal Market Institutions With Human And Algorithmic Agents: Theory And Experimental Evidence, Juergen Huber, Martin Shubik, Shyam Sunder Aug 2007

Three Minimal Market Institutions With Human And Algorithmic Agents: Theory And Experimental Evidence, Juergen Huber, Martin Shubik, Shyam Sunder

Cowles Foundation Discussion Papers

We define and examine the performance of three minimal strategic market games (sell-all, buy-sell, and double auction) in laboratory relative to the predictions of theory. Unlike open or partial equilibrium settings of most other experiments, these closed exchange economies have limited amounts of cash to facilitate transactions and include feedback. General equilibrium theory, since it abstracts away from market mechanisms and has no role for money or credit, makes no predictions about how the paths of convergence to the competitive equilibrium may differ across alternative mechanisms. Introduction of markets and money as carriers of process creates the possibility of motion. …


Three Minimal Market Institutions With Human And Algorithmic Agents: Theory And Experimental Evidence, Juergen Huber, Martin Shubik, Shyam Sunder Aug 2007

Three Minimal Market Institutions With Human And Algorithmic Agents: Theory And Experimental Evidence, Juergen Huber, Martin Shubik, Shyam Sunder

Cowles Foundation Discussion Papers

We define and examine three minimal market games (sell-all, buy-sell, and double auction) in the laboratory relative to the predictions of theory. These closed exchange economies have some cash to facilitate transactions, and include feedback. The experiment reveals that (1) the competitive general equilibrium (CGE) and non-cooperative (NCE) models are reasonable anchors to locate most but not all the observed outcomes of the three market mechanisms; (2) outcomes tend to get closer to CGE predictions as the number of players increases; (3) prices and allocations in double auctions deviate persistently from CGE predictions; (4) the outcome paths across the three …