Zero-Intelligence Trading without Resampling

Marco LiCalzi and Paolo Pellizzari

No 164, Working Papers from Department of Applied Mathematics, Università Ca' Foscari Venezia

Abstract: This paper studies the consequences of removing the resampling assumption from the zero-intelligence trading model in Gode and Sunder (1993). We obtain three results. First, individual rationality is no longer sufficient to attain allocative effciency in a continuous double auction; hence, the rules of the market matter. Second, the allocative effciency of the continuous double auction is higher than for other sequential protocols both with or without resampling. Third, compared to zero intelligence, the effect of learning on allocative effciency is sharply positive without resampling and mildly negative with resampling.

JEL-codes: C70 C92 D40 D51 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2008-05
New Economics Papers: this item is included in nep-exp and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in K. Schredelseker and F. Hauser (eds.), Complexity and Artificial Markets, Springer, 2008, 3-14

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Chapter: Zero-Intelligence Trading Without Resampling (2008)
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