Credit cycles in theory and experiment
AbstractWe test in the laboratory the potential of evolutionary dynamics as predictor of actual behavior. To this end, we propose an asymmetric game -which we interpret as a borrowerlender relation-, study its evolutionary dynamics in a random matching set-up, and tests its predictions. The model provides conditions for the existence of credit markets and credit cycles. The theoretical predictions seem to be good approximations of the experimental results.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 351.
Date of creation: Jan 1999
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Web page: http://www.econ.upf.edu/
Cycles; evolutionary dynamics; games; experiments; Leex;
Find related papers by JEL classification:
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-03-08 (All new papers)
- NEP-CMP-1999-03-10 (Computational Economics)
- NEP-EXP-1999-03-08 (Experimental Economics)
- NEP-MIC-1999-03-08 (Microeconomics)
- NEP-MON-1999-03-08 (Monetary Economics)
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