Model of the ZI-C experiment for double auction system

Since Gode and Sunder had introduced zero intelligence with budget constraint (ZI-C) agents in the double auction experiments, there has much controversy in whether the pure market discipline in ZI-C system has the ability to let the transaction prices converge to the competitive equilibrium. In this paper, we introduce a probability model to simulate the ZI experiences and try to gauge the power from the pure market. We analyze the ZI experiments, and explain the relationship between the price clearing process and the experimental settings. Our model quantifies the price convergent process, and the outputs are generally consistent with many well known ZI-C experiments. The results demonstrate that it is the mechanism of the ZI-C experiment that determines the price convergent process, and the auction market discipline itself has no predictive power as often believed.