Economic Theory

, Volume 60, Issue 2, pp 203–241 | Cite as

Learning and market clearing: theory and experiments

  • Carlos Alós-FerrerEmail author
  • Georg Kirchsteiger
Research Article


This paper investigates theoretically and experimentally whether traders learn to use market-clearing trading institutions or whether other (inefficient) market institutions can survive in the long run. Using a framework with boundedly rational traders, we find that market-clearing institutions are always stable under a general class of learning dynamics. However, we show that there exist other, non-market-clearing institutions that are also stable. Therefore, in the long run, traders may fail to coordinate exclusively on market-clearing institutions. Using a replica-economies approach, we find the results to be robust to large market size. The theoretical predictions were confirmed in a series of platform choice experiments. Traders coordinated on platforms predicted to be stable, including market-clearing as well as non-market-clearing ones, while platforms predicted to be unstable were avoided in the long run.


Market institution Market clearing Coordination  Learning 

JEL Classification

C72 D4 D83 



We thank two anonymous referees, Ana B. Ania, Johannes Buckenmaier, Luis Corchón, Michihiro Kandori, Akihiko Matsui, Alex Possajennikov, and Jörgen Weibull for helpful comments and suggestions.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of CologneCologneGermany
  2. 2.ECARESUniversité Libre de BruxellesBrusselsBelgium

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