Are sunspots learnable? An experimental investigation in a simple macroeconomic model
Date
10/10/2019Metadata
Show full item recordAbstract
We conduct experiments with human subjects in a model with a positive production externality in which productivity is a nondecreasing function of the average level of employment of other firms. The model has three steady states and a sunspot equilibrium that fluctuates between the high and low steady states. Steady states are payoff ranked: low values give lower profits than higher values. We investigate whether subjects can learn a sunspot equilibrium. We observe coordination on the extrinsic announcements in our experimental economies. Cases of apparent convergence to the low and high steady states are also observed.
Citation
Arifovic , J , Evans , G & Kostyshyna , O 2019 , ' Are sunspots learnable? An experimental investigation in a simple macroeconomic model ' , Journal of Economic Dynamics and Control , vol. In press . https://doi.org/10.1016/j.jedc.2019.103775
Publication
Journal of Economic Dynamics and Control
Status
Peer reviewed
ISSN
0165-1889Type
Journal article
Rights
Copyright © 2019 Published by Elsevier B.V. This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.1016/j.jedc.2019.103775
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