The Endogenous Evolution of Market Institutions: An Experimental Investigation

We study an experimental market in which the structure of the information flows is endogenized. When making an offer, traders choose not only the price at which they are prepared to trade, but also the subset of traders they want to inform about the offer. This design allows for two extreme institutions as special cases. If traders always inform every other trader about each offer, the resulting institution is equivalent to a double auction. If, on the other hand, traders always inform only one other trader about each offer, the resulting institution is equivalent to a decentralized bargaining market. The institution that actually evolved in the experiments, however, was in between the two extreme cases. Subjects typically informed all traders of the other market side, but none of their own side. This endogenously evolving institution, however, turned out to have the same properties as the double auction.market institution;information structure;efficiency

Particle Diffusion in Slow Granular Bulk Flows

We probe the diffusive motion of particles in slowly sheared three dimensional granular suspensions. For sufficiently large strains, the particle dynamics exhibits diffusive Gaussian statistics, with the diffusivity proportional to the local strain rate - consistent with a local, quasi static picture. Surprisingly, the diffusivity is also inversely proportional to the depth of the particles within the flow - at the free surface, diffusivity is thus ill defined. We find that the crossover to Gaussian displacement statistics is governed by the same depth dependence, evidencing a non-trivial strain scale in three dimensional granular flows.Comment: 6 page

Public Versus Private Exchanges

We study the structure of markets when traders are given the opportunity to create their own market, as on the internet.On the internet, public exchanges have in many cases been replaced by private exchanges.We use experiments to investigate possible reasons for the failure of public exchanges.In our experimental markets, when traders make an offer, they decide whom to inform about the offer.Participants typically inform all traders on the other side of the market, but not on their own side, resulting in a private, not a public exchange.This private exchange leads to the same outcomes in terms of prices and efficiency as a double auction.When we impose transaction costs on the buyers, only the sellers make private offers, which results in an inefficient market. When we provide incentives for sellers to inform each other, most of the sellers reveal a strict preference to hide offers from rivals.However, when sellers do share price information, they attain a higher price and benefit collectively

On the number of metastable states in spin glasses

In this letter, we show that the formulae of Bray and Moore for the average logarithm of the number of metastable states in spin glasses can be obtained by calculating the partition function with $m$ coupled replicas with the symmetry among these explicitly broken according to a generalization of the `two-group' ansatz. This equivalence allows us to find solutions of the BM equations where the lower `band-edge' free energy equals the standard static free energy. We present these results for the Sherrington-Kirkpatrick model, but we expect them to apply to all mean-field spin glasses.Comment: 6 pages, LaTeX, no figures. Postscript directly available http://chimera.roma1.infn.it/index_papers_complex.htm