Laboratory Behavior in Spot and Forward Auction Markets

Owen Phillips, Dale Menkhaus and Joseph Krogmeier

Experimental Economics, 2001, vol. 4, issue 3, 243-256

Abstract: Auctions that require advance production increase seller costs because inventories must be held. This cost does not exist in production-to-demand markets for which production follows trading, and sales exactly match quantities produced. Data from laboratory computerized double auction markets show that advance-production prices are significantly higher and quantities traded are significantly lower than they are in production-to-demand auctions. Price convergence patterns show advance-production sellers moving toward 9% higher prices and 22% greater earnings. Copyright Kluwer Academic Publishers 2001

Keywords: auctions; advance-production; production-to-demand (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1013269304544

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