Experimental economics summary paper Essay Example | Topics and Well Written Essays - 500 words - 5

Experimental economics summary paper - Essay Example all(prenominal) market involved a series of trading periods in which market participants were free to buy and sell. The institutions universe examined are a series of price ceilings and price controls. The study would focus on the following ternion aspects of market behavior price levels and market volumes, market responses to institutional modifications, and efficiency. The experiment led to two major results and a conjecture. First market behavior under price controls is more closely approximated by the agonistical model than by the focal point model. Secondly market under price controls exhibit behavioral regularities that are not included in standard analysis. Four of those regularizes are a) controls at the competitive correspondence cause market to diverge from the competitive equilibrium b) removal of nonbinding control induces changes in market prices c) inefficiencies bring on by are greater than those predicted by standard application d) adjustment of prices when biding controls are removed appeared to be involved an initial discontinuity or jump rather than a continuous movement. The results of the article can be summarized in that the familiar partial equilibrium model works remarkably well to describe laboratory auction market behavior in the presence of price controls and when price controls are binding.