INTRODUCTION

Since the use of laboratory experimental techniques in the testing of economic hypotheses seems to have become reasonably well established in recent years, this paper will not attempt to provide any general methodological justification for its existence. A previous study presented the results of ten exploratory pilot experiments in competitive (multitrader auction) market behavior. The major methodological purposes of that study were to (i) test the feasibility of experimental techniques, (ii) synthesize one or more standard experimental designs, and (iii) provide the foundation for a more rigorous empirical examination of several specific hypotheses. The conclusions suggested in that paper were based in part upon hypotheses whose tests and theoretical rationalization were developed after the experimental data had been obtained. The results of such a posteriori testing and theorizing based largely upon unreplicated experiments should be considered highly tentative until such results have been confirmed by fur her experiments designed specifically to test the particular hypotheses in question.

This paper will report on the results of a series of experiments designed exclusively for the purpose of testing various hypotheses concerning the price equilibrium and adjustment behavior of markets whose organization permits either sellers or buyers, but not both, to engage actively in the higgling and bargaining process.