Skip to main content

Experimental Markets: Empirical Data for Theorists

  • Chapter
Cognitive Economics

Abstract

Economic experiments can provide data of interest to cognitive economists. Likewise, cognitive economics is well-suited to the explanation of some types of experimental data. In this Chapter, we survey the principal results that have been obtained from experimental research on markets. The contrast in behavior between service and asset markets is presented as a phenomenon that might be investigated by cognitive economists. We also describe some recent developments in the experimental study of games and summarize some of the principal general ideas that have emerged.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 169.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 219.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 219.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. ABDELLAOUI M. [ 2003 ], Chapter 2, This volume.

    Google Scholar 

  2. BOLTON G., OCKENFELS A. [ 2000 ], “ERC: A Theory of Equity, Reciprocity, and Competition”, American Economic Review, 1 /90, p. 166–193.

    Article  Google Scholar 

  3. BRONFMAN C., MCCABE K., PORTER D., RASSENTI S, SMITH V. [ 1996 ], “An Experimental Examination of the Walrasian Tatonnement Mechanism”, RAND Journal of Economics, 27 (4), p. 681–699.

    Article  Google Scholar 

  4. CAMERER C., [ 2003 ], Behavioral Game Theory, Experiments in Strategic Interactions. Princeton NJ, Princeton University Press.

    Google Scholar 

  5. CAMERER C., HO T.H. [ 1999 ], “Experience Weighted Attraction Learning in Normal Form Games”, Econometrica, 67, p. 827–873.

    Google Scholar 

  6. CAMERER C., WEIGELT K. [ 1991 ], “Information Mirages in Experimental Asset Markets”, Journal of Business, 64, p. 463–493.

    Article  Google Scholar 

  7. CAMERER, COLIN F., TECK-HUA HO, JUIN-KUAN CHONG, [ 2002 ], “Sophisticated EWA Learning and Strategic Teaching in Repeated Games”, Journal of Economic Theory, 104, p. 137–188.

    Google Scholar 

  8. CHEUNG Y.W., FRIEDMAN D. [ 1997 ], “Individual Learning in Normal form games: some laboratory results”, Games and Economic Behavior, 19, p. 46–76.

    Article  Google Scholar 

  9. DAVIS D., HARRISON G., WILLIAMS A. [ 1993 ], “Convergence to Nonstationary Competitive Equilibria: An Experimental Analysis”, Journal of Economic Behavior and Organization, 20, p. 1–22.

    Google Scholar 

  10. DAVIS D., HOLT C. [ 1993 ], Experimental Economics, Princeton NJ, Princeton University Press.

    Google Scholar 

  11. DAVIS D., WILLIAMS A. [ 1986 ], “The Effects of Rent Asymmetries in Posted Offer Markets”, Journal of Economic Behavior and Organization, 7, p. 303–316.

    Article  Google Scholar 

  12. EREV I., ROTH A. [ 1998 ], “Predicting how people play games: Reinforcement learning in experimental games with unique, mixed strategy equilibria”, American Economic Review, 88, 4, September, p. 848–881

    Google Scholar 

  13. FEHR E., SCHMIDT K. [ 1999 ], “A Theory of Fairness, Competition, and Cooperation,” Quarterly Journal of Economics, 114: 3, p. 769–816.

    Article  Google Scholar 

  14. FISHER E., KELLY F. [ 2001 ], “Experimental Foreign Exchange Markets”, Pacific Economic Review, 5, p. 365–387.

    Article  Google Scholar 

  15. FORSYTHE R., PALFREY T., PLOTT C. [ 1982 ], “Asset Valuation in an Experimental Market”, Econometrica, 50, p. 537–568.

    Article  Google Scholar 

  16. FORSYTHE R., PALFREY T., PLOTT C. [ 1984 ], “Futures Markets and Informational Efficiency: A Laboratory Examination”, Journal of Finance, 39 (4), p. 955–981.

    Article  Google Scholar 

  17. FOURRAKER L., SIEGEL S. [ 1963 ], Bargaining Behavior, New York, McGraw Hill.

    Google Scholar 

  18. FRIEDMAN D., HARRISON G., SALMON J. [ 1984 ], “The Informational Efficiency of Experimental Asset Prices”, Journal of Political Economy, 92, p. 349–408.

    Article  Google Scholar 

  19. FRIEDMAN D., SUNDER S. [ 1994 ], Experimental Methods: A Primer for Economists, Cambridge, Cambridge University Press.

    Book  Google Scholar 

  20. GJERSTAD S., WILLIAMS A., SMITH V., LEDYARD J. [ 2000 ], “Concurrent Trading in Two Experimental Markets with Demand Interdependence”, Economic Theory, 16 (3), p. 511–528.

    Article  Google Scholar 

  21. GODE D., SUNDER S. [ 1993 ], “Allocative Efficiency of Markets with Zero Intelligence (ZI) Traders: Market as a Partial Substitute for Individual Rationality”, Journal of Political Economy, 101, p. 119–137.

    Article  Google Scholar 

  22. GOEREE J., HOLT C. [ 1999 ], “Stochastic Game Theory: For Playing Games, Not Just for Doing Theory”, Proceedings of the National Academy of Sciences, 96, p. 10564–10567.

    Article  Google Scholar 

  23. GOEREE J., HOLT C. [ 2001 ], “Ten Little Treasures of Game Theory and Ten Intuitive Contradictions”, American Economic Review, 91 (5), p. 1402–1422.

    Article  Google Scholar 

  24. GOODFELLOW J., PLOTT C. [ 1990 ], “An Experimental Examination of the Simultaneous Determination of Input and Output Prices”, Southern Economic Journal, 56, p. 969–983.

    Article  Google Scholar 

  25. STAHL D., HARUVY E. [ 2002 ], “Level-n Bounded Rationality and Dominated Strategies in Normal-Form Games”, working Paper, Univeristy of Texas.

    Google Scholar 

  26. HOUSER, D., K. MCCABE, L. RYAN, V. SMITH, T. TROUARD [ 2001 ], “A Functional Study of Cooperation in Two-Person Reciprocal Exchange”, Proceedings of the National Academy of Sciences, 98: 20, p. 11832–11835.

    Article  Google Scholar 

  27. JAMISON J., PLOTT C. [ 1997 ], “Costly Offers and the Equilibration Properties of the Multiple Unit Double Auction Under Conditions of Unpredictable Shifts of Demand and Supply”, Journal of Economic Behavior and Organization, 32 (4), p. 591–612.

    Article  Google Scholar 

  28. JULLIEN C., RUFFIEUX B. [ 2001 ], “Innovations, avantages concurrentiels et concurrence: Une analyse expérimentale des incitations à innover et de l’efficacité des marchés en présence de chocs endogènes”, Revue d’Economie Politique, 111 (1), p. 121–149.

    Google Scholar 

  29. KIRMAN A. [ 2003 ], Chapter 3, This volume.

    Google Scholar 

  30. KETCHAM J., SMITH V., WILLIAMS A. [ 1984 ], “A Comparison of Posted-Offer and Double-Auction Pricing Institutions”, Review of Economic Studies, 51, p. 595–614.

    Article  Google Scholar 

  31. KAGEL J., ROTH A. [ 1995 ], Handbook of Experimental Economics, Princeton University Press, Princeton NJ, USA.

    Google Scholar 

  32. KING R., SMITH V., WILLIAMS A., VAN BOENING M. [ 1993 ], “The Robustness of Bubbles and Crashes in Experimental Stock Markets,” in Prigogine I., Day R., Chen P. (eds.), Nonlinear Dynamics and Evolutionary Economics, Oxford University Press.

    Google Scholar 

  33. MEIDINGER C., ROBIN S., RUFFIEUX B. [ 2001 ], “Jeu de l’investissement et coordination par les intentions: des résultats expérimentaux”, Revue d’Economie Politique, n. 1, p. 67–93.

    Google Scholar 

  34. MEIDINGER C., ROBIN S., RUFFIEUX B. [ 1999 ], “ Confiance, Réciprocité et ‘Cheap Talk’ ”, Revue Economique, 50 /1, p. 5–44.

    Google Scholar 

  35. NAGEL R. [ 1995 ], “Experimental Results on Interactive Competitive Guessing”, American Economic Review, 85, p. 1313–1326.

    Google Scholar 

  36. NYARKO, Y., A. SCHOTTER [ 2002 ] “ An Experimental Study of Belief Learning Using Elicited Beliefs”, Econometrica, 70: 3, p. 971–1005.

    Article  Google Scholar 

  37. NOUSSAIR C., PLOTT C., RIEZMAN R. [ 1995 ], “An Experimental Investigation of the Patterns of International Trade”, American Economic Review, 85, p. 462–491.

    Google Scholar 

  38. NOUSSAIR C., ROBIN S., RUFFIEUX B. [ 1998 ], “The Effect of Transaction Costs on Double Auction Markets”, Journal of Economic Behavior and Organization, Vol. 1059, 36 (2), p. 219–231.

    Google Scholar 

  39. NOUSSAIR C., ROBIN S., RUFFIEUX B. [ 2001 ], “Price Bubbles in Laboratory Asset Markets with Constant Fundamental Values”, Experimental Economics, 4 (1), p. 87–105.

    Google Scholar 

  40. NOUSSAIR C., ROBIN S., RUFFIEUX B. [ 2003 ], “Revealing Consumers’ Willingness-To-Pay: A Comparison of the BDM Mechanism and the Vickrey Auction”, Ecole Nationale Supérieure de Génie Industriel, Working Paper.

    Google Scholar 

  41. ORLÉAN A. [ 2003 ], Chapter 12, This volume.

    Google Scholar 

  42. PLOTT C. [ 2001 ], “Equilibrium and Equilibration in Multiple Market Systems”, Nobel symposium Behavioral and Experimental Economics, Stockholm, Sweden, December.

    Google Scholar 

  43. PLOTT C., GRAY P. [ 1990 ], “The Multiple Unit Double Auction”, Journal of Economic Behavior and Organization, 13 (2), p. 245–258.

    Article  Google Scholar 

  44. PLOTT C., SUNDER S. [ 1982 ], “Efficiency of Experimental Security Markets with Insider Information: An Application of Rational-Expectations Models”, Journal of Political Economy, 90 (4), p. 663–698.

    Article  Google Scholar 

  45. PLOTT C., SUNDER S. [ 1988 ], “Rational Expectations and the Aggregation of Diverse Information in Laboratory Security Markets”, Econometrica, 56, p. 1085–1118.

    Article  Google Scholar 

  46. PORTER D., SMITH V. [ 1995 ], “Futures Contracting and Dividend Uncertainty in Experimental Asset Markets”, Journal of Business, 68 (4), p. 509–541.

    Article  Google Scholar 

  47. RABIN M. [ 1993 ], “Incorporating Fairness into Game Theory and Economics”, American Economic Review, 83, p. 1281–1302.

    Google Scholar 

  48. ROTH, A. [ 1991 ], “Game Theory as a Part of Empirical Economics”, Economic Journal, 101, p. 107–114.

    Article  Google Scholar 

  49. SAUERMANN H., SELTEN R. [ 1959 ], “Ein Oligopolexperiment”, Zeitschift fur die Gesamte Staatswissenschaft, 115, p. 427–471.

    Google Scholar 

  50. SELTEN R. [ 1991 ], “Evolution, Learning, and Economic Behavior”, Games and Economic Behavior, 3, p. 3–24.

    Article  Google Scholar 

  51. SMITH V. [ 1962 ], “An Experimental Study of Competitive Market Behavior”, Journal of Political Economy, p. 111–137.

    Google Scholar 

  52. SMITH V. [ 1981 ], “An Empirical Study of Decentralized Institutions of Monopoly Restraint”, in Quirk J., Horwich G. (eds), Essays in Contemporary Fields of Economics in Honor of E. T. Weiler (1914–1979), West Lafayette, Purdue University Press, p. 83–106.

    Google Scholar 

  53. SMITH V. [ 1982 ], “Microeconomic Systems as an Experimental Science”, American Economic Review, 72, p. 923–955.

    Google Scholar 

  54. SMITH V. [ 1994 ], “Economics in the Laboratory”, Journal of Economic Perspectives, 8, p. 113–131.

    Article  Google Scholar 

  55. SMITH V., SUCHANEK G., WILLIAMS A. [ 1988 ], “Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets”, Econometrica, p. 1119–1151.

    Google Scholar 

  56. SMITH V., WILLIAMS A. [ 1982 ], “The Effect of Rent Asymmetries in Experimental Double Auction Markets”, Journal of Economic Behavior and Organization, p. 99–116.

    Google Scholar 

  57. STAHL D. [ 2000 ], “Rule Learning in Symmetric normal-Form Games: Theory and Evidence”, Games and Economic Behavior, 32, p. 105–138.

    Article  Google Scholar 

  58. STAHL D., HARUVY E., [ 2002 ], “Level-n Bounded Rationality and Dominated Strategies in Normal-Form Games”, working Paper, Univeristy of Texas.

    Google Scholar 

  59. SUNDER S. [ 1995 ], “Experimental Asset Markets: A Survey”, dans Kagel J., Roth A. (eds.), The Handbook of Experimental Economics, Princeton NJ, Princeton University Press.

    Google Scholar 

  60. THALER R. [ 2001 ], “Doing Economics without Homo Economicus”, Nobel symposium Behavioral and Experimental Economics, Stockholm, Sweden, December.

    Google Scholar 

  61. VAN BOENING M., WILLIAMS A., LAMASTER S. [ 1993 ], “Price Bubbles and Crashes in Experimental Call Markets”, Economics Letters, 41, p. 179–185.

    Article  Google Scholar 

  62. WEIBULL J.W. [ 1995 ], Evolutionary Game Theory, MIT Press.

    Google Scholar 

  63. WILLIAMS A., SMITH V. [ 1984 ], “Cyclical Double-Auction Markets With and Without Speculators”, Journal of Business, 57, p. 1–33.

    Article  Google Scholar 

  64. WALLISER B. [ 2003 ], Chapter 4, This volume.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2004 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Noussair, C., Ruffieux, B. (2004). Experimental Markets: Empirical Data for Theorists. In: Bourgine, P., Nadal, JP. (eds) Cognitive Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-24708-1_19

Download citation

  • DOI: https://doi.org/10.1007/978-3-540-24708-1_19

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-07336-6

  • Online ISBN: 978-3-540-24708-1

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics