Individual Rationality as a Partial Impediment to Market Efficiency
نویسندگان
چکیده
In this paper, we conduct two experiments within an agent-based double auction market. These two experiments allows us to see the effect of learning and smartness on price dynamics and allocative efficiency. Our results is largely consistent with the stylized facts observed in experimental economics with human subjects. From the amelioration of price deviation and allocative efficiency, the effect of learning is vividly seen. However, smartness does not enhance market performance. In fact, the experiment with smarter agents (agents without the quote limit) results in a less stable price and lower allocative efficiency.
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