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Quantitative restrictions in experimental posted-offer markets

Praveen Kujal ()

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: The effect of imposing binding and non-binding quantity restrictions upon price convergence in posted-offer markets is discussed. Unlike in the price control experiments prices do not jump after the removal of quantity restrictions. Further, a surprising property of prices was observed in these experiments, prices converge from below the competitive equilibrium. This result contradicted the well established empirical regularity that price convergence is from above the competitive equilibrium in Posted-Offer markets. Thus, the asymmetric distribution of surplus, or the imposition of quotas themselves affected price convergence in the quota experiments.

Date: 2003-11
New Economics Papers: this item is included in nep-exp
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Chapter: Quantitative Restrictions in Experimental Posted-offer Markets (2008) Downloads
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