On-Line, "Signal-Post" Experiments with Price and Quantity Choice: Lessons From the Classroom
On-line classroom experiments with two distinguishing features are presented. The first distinguishing feature is the use of a timed, public, posting period followed by an automated transactions period. This format is termed "signal-post" and differs from standard posted auctions because of the public, changeable, nature of the postings. The second distinguishing feature of these experiments is simultaneous price and quantity choice by way of "block" trades. The goals of the experiments are to demonstrate: 1) the law of one price, 2) the marginal cost production rule, and 3) the simultaneity of individual firm choice and the market convergence process. A "base" perfect competition experiment is described and used to illustrate some practical suggestions for offering these experiments.