S. Mestelman et D. Welland, EXPERIENCE AND INVENTORY MANAGEMENT IN DOUBLE-AUCTION MARKETS, Journal of economic behavior & organization, 26(1), 1995, pp. 35-48
Prior research indicates that double-auction markets with inexperience
d traders and production to demand consistently perform very close to
the competitive ideal, with high efficiency and average prices in the
competitive equilibrium range. When the environment becomes more compl
ex, with the introduction of advance production and costless inventory
carryover, the efficiency of the double-auction market with inexperie
nced traders is reduced, and production and sales are lower, in compar
ison with the production-to-demand double auction market. The central
finding of this paper is that, even when traders are experienced, the
efficiency losses associated with this more complex double-auction env
ironment remain.