Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26820
Authors: 
Roos, Michael W. M.
Luhan, Wolfgang J.
Year of Publication: 
2008
Series/Report no.: 
Ruhr economic papers 55
Abstract: 
In this paper we report the results of a laboratory experiment, in which we observed the behavior of agents in a simple macroeconomic setting. The structure of the economy was only partially known to the players which is a realistic feature of our experiment. We investigate whether subjects manage to approach optimal behavior even if they lack important information. Furthermore, we analyze subjects' perceptions of the model and whether their behavior is consistent with their perceptions. The full information model predicts changes of employment correctly, but not the level of employment. In the aggregate, subjects have correct perceptions, although individual perceptions are biased. We finally show that deviations from the full information solution are due to optimization failures than than misperceptions.
Subjects: 
Methodology
macroeconomic experiment
perceptions
optimization
expectations
JEL: 
D01
D83
D84
B41
C91
ISBN: 
978-3-86788-058-9
Document Type: 
Working Paper

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