Evolution of markets: a simulation with centralized, decentralized and posted offer formats

Rud, O and Rabanal, J 2018, 'Evolution of markets: a simulation with centralized, decentralized and posted offer formats', Journal of Evolutionary Economics, vol. 28, no. 3, pp. 667-689.


Document type: Journal Article
Collection: Journal Articles

Title Evolution of markets: a simulation with centralized, decentralized and posted offer formats
Author(s) Rud, O
Rabanal, J
Year 2018
Journal name Journal of Evolutionary Economics
Volume number 28
Issue number 3
Start page 667
End page 689
Total pages 23
Publisher Springer
Abstract We apply standard evolutionary dynamics to study trader participation in three competing market formats -call market (CM), posted offer (PO) and decentralized market (DM). In our framework, heterogeneous buyers and sellers seek to transact a homogeneous good, which can be done by allocating their time among three different market formats. Our results show that (i) the final participation of traders in the CM is much higher, (ii) the PO can coexist with the CM, (iii) the DM unravels when competing against CM and (iv) the DM can coexist with the PO, depending on the initial participation conditions. Thus, we demonstrate that agent-based micro-simulations coupled with replication dynamics can reproduce most of the previously known theoretical results and have the potential to investigate other commonly used hybrid auction protocols.
Subject Mathematical Economics
Industry Economics and Industrial Organisation
Keyword(s) Centralized markets
Decentralized bargaining
Decentralized markets
Evolutionary dynamics
Market design
Market formation
DOI - identifier 10.1007/s00191-016-0488-y
Copyright notice © 2016, Springer-Verlag Berlin Heidelberg.
ISSN 0936-9937
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