An Experimental Test of an Optimal Growth Model

Authors: Lei V.¹; Noussair C.N.²

Source: The American Economic Review, Volume 92, Number 3, 1 June 2002 , pp. 549-570(22)

Publisher: American Economic Association

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Abstract:

This paper describes the design and behavior of an experimental economy with the structure of the Ramsey-Cass-Koopmans model of optimal growth. The experiment includes three different implementations of the model: a decentralized implementation with multiple agents and a market for capital, a treatment where individual subjects are placed in the role of social planners, and a treatment where the social planner consists of five agents making a joint decision. The findings highlight the role of market institutions in facilitating convergence to the optimal steady state. (JEL C91, C92, O40)

Language: English

Document Type: Research article

Affiliations: 1: Department of Economics, University of Wisconsin, Milwaukee, WI 53201 2: Krannert School of Management, Purdue University, West Lafayette, IN 47907

Publication date: 2002-06-01

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The American Economic Review is a general-interest economics journal. The journal is published quarterly and contains articles on a broad range of topics. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.
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