An Experimental Examination of Two Exchange Institutions

Economists have shown increasing interest in the analysis of information and organization decentralized price adjustment processes. This interest is most frequently manifested the theoretical level (summaries of the relevant literature, concepts, and methodologies been provided by Hurwicz 3 and Rothschild 4), but it also has found expression several laboratory experimental studies. These latter have unusual appeal because can serve as a "proving ground" for the former. If well-formulated theories consistently to predict simple laboratory behaviour, then one would be hesitant to trust predictions in richer environments. Furthermore, when replicable laboratory can be demonstrated, one should seek those extensions of accepted theory which why it occurs. laboratory studies have attempted to measure the effect of different forms of organization on the efficiency, performance, convergence pattern and equilibrium of prices. The variables of market organization examined have been the mechanisms rules under which prices are communicated and contracts are executed. The focus on particular variables has been motivated by the more prominent features of certain exchange institutions rather than formal models based on pre-scientific, casual of the kind that form the basis of embryonic modelling. We view the present as providing a rigorous empirical foundation for a more formal development of.