Market Mechanics

Market mechanics in experimental finance refer to the processes and rules governing how financial markets operate. This includes how buyers and sellers interact, how prices are determined through supply and demand, and how information influences trading behavior. By simulating these market conditions in a controlled environment, researchers can study participants’ decisions, behaviors, and strategies. This helps to understand complex market dynamics, test economic theories, and identify potential unexpected outcomes, ultimately enhancing our comprehension of real-world financial systems.