Smith, V. L. (1982) "Microeconomic Systems as an Experimental Science, " American Economic Review, 72, 5, 923--955.  Home/Search   Document Not in Database   Summary   Related Articles   Check

....participant s objective is to maximize surplus, defined as (limit price trade price) for buyers and (trade price limit price) for sellers. The assumptions of fixed roles and fixed limit prices conform to extensive prior studies of the CDA, including experiments involving human subjects [Smith, 1962; 1982] and automated bidding agents [Cliff and Bruten, 1997; Gjerstad and Dickhaut, 1998] Under such assumptions, a market consisting of rational players will eventually converge to steady trading at an equilibrium price p , at which there is a balance between Supply (the total number of units that ....

....can be bought for positive surplus) For each participant, one can define a theoretical surplus as the total surplus that would be obtained if all units traded at p . One can also define a participant s efficiency as the ratio of actual surplus to theoretical surplus. In human subject studies [Smith, 1962; 1982] , convergence close to equilibrium was found within several periods, with the approach towards p exhibiting a scalloped shape (i.e. a decelerating curved trajectory) of progressively smaller amplitude in each successive period. Robust convergence to equilibrium was also found in homogeneous ....

V. L. Smith. Microeconomic systems as an experimental science. American Economic Review, 72:923-- 955, 1982.

....supply and demand. Smith and many other economists in the 35 years since his initial studies have also documented features of the path of convergence to equilibrium in a variety of market environments. For surveys and interpretation of these experimental results, see Plott [11] and Smith [13]. Models of trader behavior in the DA have been constructed by several authors, including Easley and Ledyard [3] Friedman [4] Gode and Sunder [7] and Wilson [14] Although these models have furthered understanding of the interaction of individual behavior and institution in the DA, we provide ....

....interpret the double auction environment and institution within this framework, and construct an informationally decentralized model of trader behavior for these environments in the double auction institution. The double auction is an example of a microeconomic system as in Hurwicz [9] and Smith [13]. The primary features of a microeconomic system are the environment e, consisting of the characteristics of the economic agents, and the institution I, which includes the messages that traders may send to one another, the allocation rules, and the adjustment process rules. A microeconomy is an ....

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Smith, V.L.: Microeconomic Systems as an Experimental Science. American Economic Review 72 (1982) 923-955.

....economic theorists, and as a result there have been numerous theoretical and empirical studies of CDAs. Experiments with human subjects in laboratory simulations of CDAs have found reliable and rapid convergence of prices to values extremely close to the theoretical competitive equilibrium values [10, 11]. There have also been several studies of CDAs with various types of computerized bidding agents [1, 2, 3, 5, 6, 8, 9] A major comparative study of several di erent agent trading strategies was performed in the Santa Fe Double Auction Tournament (SFDAT) Rust et al. 8] Over 30 di erent ....

V. L. Smith. Microeconomic systems as an experimental science. American Economic Review, 72:923-955, 1982. 11

....In the CDA, bids and asks may be submitted and traded at any time during the trading period. The CDA is the dominant institution for real world trading of equities, derivatives, etc. Experiments with human subjects in simulated CDAs find reliable price convergence close to theoretical equilibria [9, 10]. Several studies examined CDAs with various computerized bidding agents [1, 2, 4, 5, 8] including a major comparative study in the Santa Fe Double Auction Tournament (SFDAT) 7] The principal conclusion was that Todd Kaplan s simple sniping strategy, which waits for the bid ask Permission ....

V. L. Smith. Microeconomic systems as an experimental science. American Economic Review, 72:923--955, 1982.

.... design theory will recognize an iterative auction as a special case of a resource allocation process as originally described by Hurwicz (1960) Readers familiar with experimental economics will recognize an iterative auction as a special case of a microeconomic system as originally described by Smith (1982). Rather than providing a fully general framework, in this paper we will focus on the designs we evaluate. Let I = 1, N represent the set of bidders, K = 1, K represent the set of objects to be sold and t =1, 2, 3, represent the iterations or rounds. In general, a bid can be a very ....

Smith, V. L. 1982. Microeconomic systems as an experimental science. American Economic Review 72:923--955.

....which is needed to give to the experimenter the control over the environment of the experiment. The monetary payoff offered to the subject must be sufficient to overcome the subjective factors, which are difficult to evaluate and extraneous to the theory. This is the dominance condition (see Smith (1982)) A quantitative condition for dominance is that the payoff must be large enough to insure that the reward corresponding to the experimental hypothesis are perceptibly and motivationally greater than the rewards corresponding to the alternative hypothesis. A qualitative condition is, however, ....

Smith V., (1982) "Microeconomic Systems as an Experimental Science", American Economic Review, December 1982, 72, 923-955.

.... for example, Malvey, Archibald and Flynn 1996 and Reinhart and Belzer 1996) The question has also spawned an extensive literature of laboratory experiments, which has tended to slightly favor the uniform price auction, except when bidders demand curves are sufficiently steep (see, for example, Smith 1967, 1982). Theoretical arguments have tended to draw the imperfect analogy from the single item case. For example, Chari and Weber (1992, p. 8) note that when each bidder demands only a single unit: The uniform price (second price) auction dominates the discriminatory (first price) auction. They then ....

Smith, Vernon L. (1982), "Microeconomic Systems as an Experimental Science," American Economic Review, 72, 923-955.

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Smith, Vernon L., "Microeconomic Systems as an Experimental Science", American Economic Review, 72: 923-55, (1982).

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Smith, V. L. (1982) "Microeconomic Systems as an Experimental Science, " American Economic Review, 72, 5, 923--955.

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Smith, Vernon, "Microeconomic Systems as an Experimental Science," American Economic Review, 72: 923-955, (1982).

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Smith, Vernon L. (1982), "Microeconomic Systems as an Experimental Science," American Economic Review, 72, 923-955.

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