Double Auctions.
Abstract
In practice, markets are organized in many different ways. They differ in the trading rules that regulate the exchange process, and in the special roles played by intermediaries such as brokers and specialists. In every case, however, the terms of trade ultimately depend upon the actions chosen by the participants. Each agent therefore has an incentive to take account of this dependence in deciding on the trading strategy to use. Much of modern economic theory in the Walrasian mold, nevertheless, has been based on a model that assumes that buyers and sellers respond to prices that are known beforehand to clear the market. Though implausible, this model is at least consistent: if the agent's preferences and endownments are common knowledge then (under suitable regularity assumptions) there exist prices that, if calculated and fixed beforehand, would achieve equality between the buyer's demands and the sellers' supplies. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 1982
- Accession Number
- ADA127896
Entities
People
- Robert Wilson
Organizations
- Stanford University