<p>Hidden on the third page (left column, middle) you can find that the markets they set up experimentally comprised 8 buyers and 4 sellers. If you multiply the individual demand and supply values from Table 1 by the corresponding number of individuals, you get the linearly approximated demand and supply functions stated on the second page.</p>

CC BY-SA 4.0
2021-05-12T21:56:37.127Z
2021-05-12T21:56:37.127Z
VARulle
<p>In the second page of this <a href="https://www.pnas.org/content/pnas/112/47/14557.full.pdf" rel="nofollow noreferrer">paper</a> Gjerstad et al derive the market demand and the supply for assets using the data shown in Table 1.</p>
<p>The table is <a href="https://i.sstatic.net/BDPOb.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/BDPOb.png" alt="enter image description here" /></a></p>
<p>The demand function they find is <span class="math-container">$Q = 94 – 0.4 P$</span> and the supply function is <span class="math-container">$Q = P/15 – 1$</span></p>
<p>I cannot understand how the functional form they find relates to the data in the table: can someone help me understand how do they derived it?</p>

CC BY-SA 4.0
2021-05-12T15:50:27.043Z
Can you please make the question more self-contained?
Giskard
CC BY-SA 4.0
2021-05-12T15:52:09.907Z
@Giskard Am I allowed to include the relevant parts of the paper in the question?
fennel
CC BY-SA 4.0
2021-05-12T16:22:20.403Z
Not sure what you mean - allowed by whom? I specifically ask you to do so.
Giskard
<supply-and-demand><asset-pricing><demand>
Derive the market demand function and market supply function
fennel
# Derive the market demand function and market supply function

(Asked by: username_0 on 2021-05-12)

In the second page of this [paper](https://www.pnas.org/content/pnas/112/47/14557.full.pdf) Gjerstad et al derive the market demand and the supply for assets using the data shown in Table 1.

The table is [![enter image description here](https://i.sstatic.net/BDPOb.png)](https://i.sstatic.net/BDPOb.png)

The demand function they find is $Q = 94 – 0.4 P$ and the supply function is $Q = P/15 – 1$

I cannot understand how the functional form they find relates to the data in the table: can someone help me understand how do they derived it?

**Tags:** supply-and-demand, asset-pricing, demand
> **Comments:**
> **username_1**: Can you please make the question more self-contained?  
> **username_0**: @Giskard Am I allowed to include the relevant parts of the paper in the question?  
> **username_1**: Not sure what you mean - allowed by whom? I specifically ask you to do so.  

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## 1 answers

### Answer by username_2 on 2021-05-12. Score: 1 | Accepted answer

Hidden on the third page (left column, middle) you can find that the markets they set up experimentally comprised 8 buyers and 4 sellers. If you multiply the individual demand and supply values from Table 1 by the corresponding number of individuals, you get the linearly approximated demand and supply functions stated on the second page.


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