An experimental study of decisions in dynamic optimization problems
AbstractWe study decisions of subjects who are given an incentive to solve dynamic optimization problems with the structure of a single-agent, one-sector, closed economy macroeconomic model. The decision task involves a sequence of choices of consumption and investment levels. Treatment variables consist of the initial endowment of capital stock, the production technology available to the economy, and the method of creating the structure of an infinite-horizon model. The study includes and contrasts data from both American and Japanese participants. We find that whether over- or underinvestment relative to the optimum occurs depends on the production technology, but not on the initial endowment of capital stock, nor the subject pool used, nor the method of implementing the infinite horizon. Sudden episodes of maximal consumption called binges, which are always suboptimal, are widely observed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 15 (2000)
Issue (Month): 2 ()
Note: Received: December 7, 1998; revised version: March 12, 1999
Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Noussair, C. & Matheny, K. & Olson, M., 1998. "An Experimental Study of Decisions in Dynamic Optimization Problems," Purdue University Economics Working Papers 1110, Purdue University, Department of Economics.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Roberto Ricciuti, 2004.
"Bringing Macroeconomics into the Lab,"
ICER Working Papers
26-2004, ICER - International Centre for Economic Research.
- Roberto Ricciuti, 2003. "Bringing Macroeconomics into the Lab," Royal Holloway, University of London: Discussion Papers in Economics 03/9, Department of Economics, Royal Holloway University of London, revised Dec 2003.
- Roberto Ricciuti, 2005. "Bringing Macroeconomics into the Lab," Labsi Experimental Economics Laboratory University of Siena 004, University of Siena.
- C. Mónica Capra & Tomomi Tanaka & Colin F. Camerer & Lauren Munyan & Veronica Sovero & Lisa Wang & Charles Noussair, 2005.
"The Impact of Simple Institutions in Experimental Economies with Poverty Traps,"
666156000000000662, UCLA Department of Economics.
- C.Mónica Capra & Tomomi Tanaka & ColinF. Camerer & Lauren Feiler & Veronica Sovero & CharlesN. Noussair, 2009. "The Impact of Simple Institutions in Experimental Economies with Poverty Traps," Economic Journal, Royal Economic Society, vol. 119(539), pages 977-1009, 07.
- C. Monica Capra & Tomomi Tanaka & Colin Camerer & Lauren Munyan & Veronica Sovero & Lisa Wang & Charles Noussair, 2005. "The Impact of Simple Institutions in Experimental Economies with Poverty Traps," Emory Economics 0508, Department of Economics, Emory University (Atlanta).
- Robinson, W.T. & Min, S., 1998. "Is the First to Market the First to fail?: Empirical Evidence for Manufacturing Business," Purdue University Economics Working Papers 1115, Purdue University, Department of Economics.
- Ferruccio Ponzano & Roberto Ricciuti, 2012. "An Experimental AK Model of Growth," CESifo Working Paper Series 3744, CESifo Group Munich.
- Wolfgang J. Luhan & Johann Scharler, 2013.
"Monetary Policy, Inflation Illusion and the Taylor Principle – An Experimental Study,"
Ruhr Economic Papers
0402, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Wolfgang Luhan & Johann Scharler, 2013. "Monetary Policy, Inflation Illusion and the Taylor Principle: An Experimental Study," Working Papers 2013-03, Faculty of Economics and Statistics, University of Innsbruck.
- Lei, V. & Noussair, C., 2000.
"An Experimental Test of an Optimal Growth Model,"
Purdue University Economics Working Papers
1131, Purdue University, Department of Economics.
- Cellarier, Laurent L., 2008. "Least squares learning and business cycles," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 553-564, December.
- Vivian Lei & Charles N. Noussair, 2007. "Equilibrium Selection in an Experimental Macroeconomy," Southern Economic Journal, Southern Economic Association, vol. 74(2), pages 448-482, October.
- John Duffy & Sean Crockett, 2010. "An Experimental Test of the Lucas Asset Pricing Model," Working Papers 504, University of Pittsburgh, Department of Economics, revised May 2013.
- Dawid, Herbert & Day, Richard H., 2007. "On sustainable growth and collapse: Optimal and adaptive paths," Journal of Economic Dynamics and Control, Elsevier, vol. 31(7), pages 2374-2397, July.
- John Duffy, 2008. "Macroeconomics: A Survey of Laboratory Research," Working Papers 334, University of Pittsburgh, Department of Economics, revised Mar 2008.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.