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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27484
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| Title: | Double Auction Dynamics: Structural Effects Of Non-Binding Price Controls |
| Authors: | Gode, Dhanajay K.
Sunder, Shyam |
| Keywords: | Price Controls
Zero-Intelligence
Double Auction Dynamics
Allocative Efficiency |
| Issue Date: | May-2003 |
| Series/Report no.: | Dhananjay (Dan) K. Gode-07 |
| Abstract: | In competitive equilibrium, non-binding price controls (that is, price
floors below and ceilings above the equilibrium) should not affect
market outcomes, but in laboratory experiments they do. We build a
simple dynamic model of double auction markets with
"zero-intelligence" (ZI) computer traders that accounts for
many, though not all, of the discrepancies between the data and the
Walrasian tatonnement predictions. The success of the model in
organizing the data, and in isolating various consequences of price
controls, shows that the simple ZI model is a powerful tool to gain
insights into the dynamics of market institutions. |
| URI: | http://hdl.handle.net/2451/27484 |
| Appears in Collections: | Accounting Working Papers
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