A factual account of the functioning of the nineteenth-century Paris Bourse

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Abstract
The auctioneer type of price formation process used in economic theory, allegedly based on the functioning of the nineteenth-century Paris Bourse, did not in fact have an empirical counterpart in that institution. Contemporaneous accounts are used to provide a correct description of it. It is shown that its institutions and procedures were very different from the received ideas. Prices were not called out by a market official; securities were not traded in the order in which they appeared on a list; disequilibrium transactions occurred; information varied during the course of the day; and a given security traded at many different prices during the course of a given session, and sometimes simultaneously at different prices.

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