Here are some take home messages form today’s in class experiment. I tell a story of ‘demand and supply” – in a couple of weeks this will all seem very elementary, but the experiment today gives us a great experience with using a model to interpret and predict some interesting features of what was going on in the various sessions and rounds of today’s class experiment. Note the order: we start with the messy reality of the trading floor in the experiment, then look at a VERY simplistic model, concepts and a graph, to develop some understanding, and as we shall see, some predictions. Was this model very good at predicting? Was it better or worse in various rounds, in various sessions. Why was the first round so long…and later rounds over in a very short period of time?
The real world open outcry trading pits are giving way in the world of finance to electronic trading. Here is a recent NY times article describing the institution and its closing. There is an hour and a half doco movie Floored that is a fascinating (but gritty) story built around some of the high (and low) rollers on the Chicago mercantile change , in its hey- dey, and in its decline. The full length movie is available on dvd as well as online on youtube