The questions posed for study are motivated by controversies over how Sweden might change from a centralized system of railroad management to a decentralized system. The central rail administration, Banverk, will retain ownership and maintenance responsibility of the tracks, but will sell access to the tracks to private firms. The questions are about the mechanism that might accomplish this task. Parties to the controversy have claimed that the technical aspects of networks will, as a matter of principle, preclude the operation of any decentralized method. This paper explores the properties of a mechanism developed as a challenge to that claim. The mechanism is examined in the context of a testbed experimental environment that contains many potential problem causing elements. In the tests performed the mechanism operated to efficiently allocate access to the network and it did so for behavioral reasons that are understandable in . terms of theory. The paper closes with suggestions for further study of environments that might present additional challenges to a mechanism.

Summary. Several`smart market' mechanisms have recently appeared in the literature. These mechanisms combine a computer network that collects bids from agents with a central computer that selects a schedule of bids to ®ll based upon maximization of revenue or trading surplus. Potential problems exist when this optimization involves combinatorial diculty sucient to overwhelm the central computer. This paper explores the use of a computation procuring clock auction to induce human agents to approximate the solutions to discrete constrained optimization problems. Economic and computational properties of the auction are studied through a series of laboratory experiments. The experiments are designed around a potential application of the auction as a secondary institution that approximates the solution to dicult computational problems that occur within the primarỳ smart market', and show that the auction is eective and robust in eliciting and processing suggestions for improved schedules.

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We study consequences of regulatory interventions in limit order markets that aim at stabilizing the market after an occurrence of a "flash crash". We use a simulation platform that creates random arrivals of trade orders, that allows us to analyze subtle theoretical features of liquidity and price variability under various market structures. The simulations are performed under continuous double-auction microstructure, and under alternatives, including imposing minimum resting times, shutting off trading for a period of time, and switching to call auction mechanisms. We find that the latter is the most effective in restoring the liquidity of the book and recovery of the price level. However, one has to be cautious about possible consequences of the intervention on the traders' strategies, including an undesirable slowdown of a convergence to a new equilibrium after a change in fundamentals.

Back haul problems occur in many areas of transportation. One-way rental often takes equipment, such as cases and containers, from an area of high demand to an area of low demand. The problem is to return the equipment to the location of need, a problem typically viewed as an admimstrative and scheduling problem. We developed a decentrali7cd approach in which a specially designed market organizes competition and information to minimize the cost of back-hauls without the direct intervention of administrative negotiations or comm,mdand-control types of scheduling. We employed laboratory experimental methods to test the concept, examine its performance against thcorellcal benchmarks, and explore its limitations. (Trn11sportntion: costs. Games/group decisions: bidding/auctions.)