Premium
MARKET POWER IN ORAL DOUBLE AUCTIONS
Author(s) -
HOLT CHARLES A.,
LANGAN LOREN W.,
VILLAMIL ANNE P.
Publication year - 1986
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1986.tb01800.x
Subject(s) - double auction , common value auction , economics , market power , microeconomics , convergence (economics) , supply and demand , perfect competition , market structure , macroeconomics , monopoly
This paper reports the results of a series of oral‐double‐auction experiments in which some traders possess market power. A market is set up in which the configuration of the supply and demand curves leads to an asymmetry between buyers and sellers in their abilities to influence transactions prices. This market structure does not always lead to convergence to the competitive equilibrium price despite the competitive nature of the oral‐double‐auction institution. The nonconvergence occurs most frequently in the experiments involving experienced subjects.