[T]he basic design of Chamberlin (1948) for inducing individual reservation prices and aggregate supply and demand curves has become one of the most widely used techniques in experimental economics.
Interestingly, Chamberlin (1948) reports systematic gap between his experimental results and the competitive equilibrium. The experimental design and its results are summarized as follows.
Chamberlin created an experimental market by informing each buyer and seller of his reservation price for a single unit of an indivisible commodity, and he reported the transactions that resulted when buyers and sellers were then free to negotiate with one another in a decentralized market.
The experiment he reported involved 46 markets, with slightly varying equilibrium prices. He observed that the number of units transacted was greater than the competitive volume in 42 of these markets and equal to the competitive volume in the remaining 4 markets, while the average price was below the competitive price in 39 of these markets and higher in the rest.
By contrast, (repeated) double auctions experimented by Smith (1962) result in convergence to the equilibrium.
One important form of market organization is the double auction market, first experimentally studied by Smith (1962), who observed rapid convergence to competitive equilibrium when the market was repeated several times with stationary parameters.
One might be puzzled why the number of transaction in ALL experiments in Chamberlin (1948) exceed or equal to the competitive volume: none falls below it. My recent article, Equal Market Design I: Competitive Market Achieves the Greatest Happiness of the Minimum Number, provides a theoretical account on this puzzle. This short paper (only 8 pages!) shows that the number of agents who engage in trades under any market equilibrium is MINIMUM among all Pareto efficient and individually rational allocations in the environment where redistribution by the third party is infeasible, i.e., no monetary transfers beyond buyer-seller pairs are prohibited. So, if buyers and sellers in Chamberlin's experiments somehow manage to reach the PE and IR allocations (it is likely although I have to check the original data if available), the number of transaction must be weakly larger than that of competitive equilibrium.
I would like to thank Prof. Morimitsu Kurino who pointed out the possible connection between experimental studies and my research, explicitly mentioning the above two papers, i.e., Chamberlin (1948) and Smith (1962).
Chamberlin, E. H. (1948). An experimental imperfect market. The Journal of Political Economy, 95-108.
Kagel, J. H. and Roth, A. E. (1995). The handbook of experimental economics. Princeton, NJ: Princeton university press.
Smith, V. L. (1962). An experimental study of competitive market behavior. The Journal of Political Economy, 111-137.
Yasuda, Y. (2016). Equal Market Design I: Competitive Market Achieves the Greatest Happiness of the Minimum Number, mimeo. SSRN#2755893