Price Controls and the Behavior of Auction Markets: An Experimental Examination

Abstract

Price ceilings and price floors are common in all market systems. The ancient Greeks and Hellenistic era Egyptians are known to have utilized price controls (see H. Michele, p. 272, and J. P. Levy, p. 41), and numerous public policy questions today involve them. Apparently for as long as price controls have existed, their effects have been debated. For example, Diocletion's favorable view of his price ceilings' was disputed by the religious philosopher, Lactantius, who charged that the policy led to "scarcity and... low grade articles" (p. 145).

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