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Exchange and Specialisation as a Discovery Process

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  • Sean Crockett
  • Vernon L. Smith
  • Bart J. Wilson

Abstract

In this article we study the performance of an economy that can support specialisation if the participants develop and follow some system of exchange. We define a closed economy in which the participants must discover the ability to exchange, implement it, and ascertain what they are comparatively advantaged in producing. Many of our participants demonstrate the ability to find comparative advantage, capture gains from trade and effectively choose production that is consistent with the choices of others. We explore various treatments to provide insight into the conditions that foster the growth of specialisation and exchange within this weak institutional framework.

Suggested Citation

  • Sean Crockett & Vernon L. Smith & Bart J. Wilson, 2009. "Exchange and Specialisation as a Discovery Process," Economic Journal, Royal Economic Society, vol. 119(539), pages 1162-1188, July.
    • Handle: RePEc:wly:econjl:v:119:y:2009:i:539:p:1162-1188
    DOI: 10.1111/j.1468-0297.2009.02254.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • F10 - International Economics - - Trade - - - General

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