Learning to Trade in an Unbalanced Market

Florian Hauser () and Marco LiCalzi
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Florian Hauser: Universität Innsbruck

A chapter in Emergent Results of Artificial Economics, 2011, pp 65-76 from Springer

Abstract: Abstract Recently, Fano et al. [2] have studied the evolution of trading strategies for a double auction when the number of traders increases. They provide two main results. First, the competitive outcome obtains under different market architectures, provided that the size of the market is sufficiently large. Second, the choice of the order-clearing rule affects trading behavior. Under simultaneous order-clearing, marginal traders learn to act as price takers and make offers equal to their valuations or costs. Under asynchronous order-clearing, the intramarginal traders learn to act as price makers and make offers equal to the competitive price.

Keywords: Trading Strategy; Strategic Behavior; Price Taker; Uniform Price; Competitive Price (search for similar items in EconPapers)
Date: 2011
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Working Paper: Learning to trade in an unbalanced market (2011)
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DOI: 10.1007/978-3-642-21108-9_6

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