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The Double‐Auction Gambling Market: An Experimental Examination
Author(s) -
Hampton Kyle W.
Publication year - 2007
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.2007.00524.x
Subject(s) - double auction , status quo , mechanism (biology) , matching (statistics) , microeconomics , volatility (finance) , institution , economics , econometrics , common value auction , mathematics , statistics , market economy , law , philosophy , epistemology , political science
A bstract . I examine a new sports wagering mechanism that utilizes a double auction rather than the traditional wager matching bookmaker. Laboratory experiments were performed that modeled the two institutions in an attempt to compare the efficiency and volatility of the new mechanism versus the status quo. The new proposed double auction institution was less efficient and more volatile than the matching mechanism. However, the relative performance of the double auction mechanism was significantly improved by an increase in the size of the market.