The Nature of Excess: Using Randomization to Understand How Markets Equilibrate

Last registered on October 04, 2023
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Pre-Trial

Trial Information

General Information

Title
The Nature of Excess: Using Randomization to Understand How Markets Equilibrate
RCT ID
AEARCTR-0009355
Initial registration date
September 29, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 04, 2023, 4:51 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Michael Price
Affiliation
University of Alabama
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Ariel Listo
PI Affiliation

Additional Trial Information

Status
In development
Start date
2023-10-01
End date
2023-12-15
Keywords
Behavior, Other
Additional Keywords
Competitive equilibrium, Chamberlin market, double auction, bilateral bargaining
JEL code(s)
D41, D43, D44, C78
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We investigate how prices adjust when markets are in disequilibrium by comparing two models of price dynamics: the classic excess supply model developed by Leon Walras, and the excess rent model developed by Vernon Smith. Past investigations exploring how prices adjust rely upon naturally-occurring variation in the treatment variable (prevailing price) as opposed to experimental control via randomization. We explore price dynamics using laboratory experiments wherein we control the assignment mechanism of the key treatment variable and across two distinct market institutions, double oral auctions and decentralized bilateral bargaining
External Link(s)

Registration Citation

Citation
Listo, Ariel and Michael Price. 2023. "The Nature of Excess: Using Randomization to Understand How Markets Equilibrate." AEA RCT Registry. October 04. https://doi.org/10.1257/rct.9355-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2023-10-01
Intervention End Date
2023-12-15

Primary Outcomes

Primary Outcomes (end points)
The rate of change in price
Primary Outcomes (explanation)
The rate of change in price is defined as the prevailing price in time t minus the prevailing price in time t-1

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The explanatory variable of interest (p_(t-1) - p*), where p* is the equilibrium price level, is exogenously varied using randomized control within a market system where the predictions of the excess supply and excess rent model differ.
Experimental Design Details
Randomization Method
Randomization done in office by a computer
Randomization Unit
Round within a session
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
20-25 sessions (depending on recruitment capabilities as sessions require exact number of participants)
Sample size: planned number of observations
600 across 25 sessions
Sample size (or number of clusters) by treatment arms
2 or 4 observations per treatment per cluster
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
George Mason University Office of Research Subject Protections
IRB Approval Date
2008-12-02
IRB Approval Number
6088
IRB Name
University of Alabama IRB
IRB Approval Date
2023-08-11
IRB Approval Number
22-02-5363
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials