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Credit cycles in theory and experiment



We 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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  • Antoni Bosch-Domènech & María Sáez, 1999. "Credit cycles in theory and experiment," Economics Working Papers 351, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:351

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    References listed on IDEAS

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    More about this item


    Cycles; evolutionary dynamics; games; experiments; Leex;

    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

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