The contribution of experimental economics to the analysis of market efficiency
Stéphane Robin et Carine Staropoli
Markets function according to rules that organise the procedures of exchange: we speak of market institutions. The great majority of these institutions did not emerge spontaneously. They are the product of an approach called “institutional engineering”, which takes into account the characteristics of the product to be exchanged and a “clean” market environment of the market itself. The European carbon trading scheme market (EU ETS)*, the electronic markets that have grown everywhere with the development of the internet and the market in electricity shares, created in the context of the deregulation of the electrical power sector in the 1990s, are recent examples that illustrate the diversity of market situations.
These economics researchers contribute to the theoretical and empirical analysis of market efficiency : in this article, Stéphane Robin and Carine Staropoli show the value of the experimental method, not only for studying the behaviour of market actors, but also for thinking about market regulations before they are made operational. From this perspective, the experimental economics laboratory functions like a simulator for refining our knowledge of economic mechanisms. The authors present the methodological methods for making a market function in the laboratory; they also report on the main findings concerning the most renowned regulations, such as the “oral continuous double bet” which is the traditional form of exchange for homogenous goods (share markets, raw materials markets). Then, using the example of electricity markets, the authors show how their laboratory experiments went through the process of conceptualising and implementing rules of exchange so complex and specific to the sector that the theory offers only limited analysis of them. They conclude that new experimental methods must be developed combining studies in the laboratory and in the field: economics researchers could, for example, investigate the new issues in market design and pricing in the context of the energy transition.
* Introduced in 2005 following the Kyoto Protocol.
Original title of the article: La contribution de l’économie expérimentale à l’analyse de l’efficacité des marchés
Published in : Revue Française d’Economie, Vol. XVIII, octobre 2013, 91-120.
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