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ERIC Number: EJ696603
Record Type: Journal
Publication Date: 2004-Oct
Pages: 26
Abstractor: Author
ISBN: N/A
ISSN: ISSN-0022-3808
EISSN: N/A
Testing Neoclassical Competitive Theory in Multilateral Decentralized Markets
List, John A.
Journal of Political Economy, v112 n5 p1131 Oct 2004
Walrasian tatonnement has been a fundamental assumption in economics ever since Walras' general equilibrium theory was introduced in 1874. Nearly a century after its introduction, Vernon Smith relaxed the Walrasian tatonnement assumption by showing that neoclassical competitive market theory explains the equilibrating forces in "double-auction" markets. I make a next step in this evolution by exploring the predictive power of neoclassical theory in decentralized naturally occurring markets. Using data gathered from two distinct markets --the sports card and collector pin markets -- I find a tendency for exchange prices to approach the neoclassical competitive model prediction after a few market periods.
University of Chicago Press, Journals Division, P.O. Box 37005, Chicago, IL 60637. Tel: 773-753-3347; Web site: http://www.journal.uchicago.edu; e-mail: subscriptions@press.uchicago.edu
Publication Type: Journal Articles
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A