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Author Question: Are there real-world markets that resemble double oral auctions? Suppose you had to organize a ... (Read 44 times)

xclash

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on: Jun 29, 2018
Are there real-world markets that resemble double oral auctions? Suppose you had to organize a double oral auction for a good that has perfectly elastic demand. Do you expect prices to approach the competitive equilibrium?
 
  What will be an ideal response?

Question 2

The Glass-Steagall Act
 
  A) was passed in response to the financial crisis of 2007-2009.
  B) requires that CEO's personally certify the accuracy of financial statements.
  C) prevented financial firms from being both commercial banks and investment banks.
  D) all of the above


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Tabitha_2016

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Double oral auctions are similar to how trading actually works on stock exchangestraders announce bids and asks and if they match, a trade is executed.
Double oral auction experiments with many different market variants - including varying the elasticity of supply and demand and the numbers of buyers and sellers - have shown that the equilibrium price in the market will be very close to where the supply and demand curves intersect. So, the price in a double oral auction for a good with perfectly elastic demand is also expected to approach the equilibrium price.

Answer to Question 2

C


xclash

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

ghepp

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Reply 3 on: Yesterday
Excellent

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