This program runs a one-sided auction in which
sellers post prices independently on a take-it-or-leave-it basis at the start of each market
period or "round." Buyers then place orders at the posted prices, so
buyers are not simulated.
Posted prices are characteristic of many markets where
individual negotiation is not possible. This institution is often found
where one side of the market is "thinner," as is the case with retail markets
with large numbers of potential buyers.
The program collects and displays price information.
Market efficiency is measured as the fraction of maximum possible
value created by the trading process, i.e. the ratio of the sum
of all buyers' and sellers' earnings to the maximum possible
value of this sum. Setup parameters include demand and/or supply shifts and
buyer and/or seller communication.
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For an introductory discussion
of behavior in laboratory posted offer markets,
see Holt (2006), Markets, Games, and Strategic Behavior,
Addison-Wesley, Chapters 8 and 9. A seminal paper on the posted price process
is Plott and Smith (1978) "An Experimental Examination of Two Exchange
Institutions," RE Stud..
Vecon Lab - July 25, 2014