COMPETITIVE MARKET BEHAVIOR: CONVERGENCE AND ASYMMETRY IN THE EXPERIMENTAL DOUBLE AUCTION

We conducted a large number of controlled continuous double auction experiments to reproduce and stress-test the phenomenon convergence competitive equilibrium under private information with decentralized trading feedback. Our main finding is that across total 104 markets (involving over 1,700 subjects), occurs after handful periods. Initially, however, there an inherent asymmetry favors buyers, typically resulting in prices below levels. Analysis 80,000 observations individual bids asks helps identify empirical ingredients contributing observed phenomena including higher levels aggressiveness initially among buyers than sellers.