Abstract
We present the results of five laboratory posted-offer experiments in which the competitive equilibrium model predicts that all exchange profits are received by one side of the market, thus defining a boundary condition. Price converges to the prediction more slowly when buyers rather than sellers receive the exchange surplus, apparently due to the increased market power of sellers in this trading mechanism. A model of the seller's decision in this market is developed to explain this result. We also observe costly signalling and tacit collusion in our experiments.
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