Production, Trade, Prices, Exchange Rates and Equilibration in Large Experimental Economies
Abstract
We study market equilibration in laboratory economies that are larger and more complex than any that have been studied experimentally to date. Complexity is derived from the fact that the economies are "international" in economic structure with multiple input, output, and foreign exchange markets in operation. The economies have twenty-one markets and due to the fact that they have roughly fifty agents, the economies are characterized by several hundred equations. In spite of the complexity and interdependence of the economy, the results demonstrate the substantial power of the general equilibrium model of perfect competition to predict the direction of movement of market-level variables. Empirical patterns in the convergence process are explored and described.
Additional Information
© 2006 Elsevier B.V. We thank Carol McAusland, Jacob Goeree, Zheng Liu, and seminar participants at Nottingham University, the University of Amsterdam, and the Hong Kong University of Science and Technology for helpful comments. We thank Steven Tucker and Tara Larson for research assistance.Additional details
- Eprint ID
- 44080
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- CaltechAUTHORS:20140303-101923699
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2014-03-03Created from EPrint's datestamp field
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2021-11-10Created from EPrint's last_modified field