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
Collections
Items in the St Andrews Research Repository are protected by copyright, with all rights reserved, unless otherwise indicated.