This study reports on a block of experimental market sessions designed primarily to provide (1) the severest test yet attempted of the equilibrating forces operating in competitive auction markets and (2) a more rigorously controlled test of the Walrasian hypothesis. Some data are also supplied which show the effect of cash payoffs on the equilibrating behavior of such markets; in particular, the effect of full cash payoffs to all successful trading subjects as against payoffs to a subset of such subjects chosen at random.
Smith, Vernon L. “Experimental Auction Markets and the Walrasian Hypothesis.” Journal of Political Economy, 73.4 (1965): 387-393.
University of Chicago
This article was originally published in Journal of Political Economy, volume 73, issue 4, in 1965.