Shachat, J. and Zhang, Z. (2017) 'The Hayek hypothesis and long run competitive equilibrium : an experimental investigation.', Economic journal., 127 (599). pp. 199-228.
Abstract
We report on an experiment investigating whether the Hayek Hypothesis (Smith, 1982) extends to the long run setting. We consider two environments; one with a production technology having a U-shaped long run average cost curve and a single competitive equilibrium, and another with a constant long run average cost curve. We present alternative efficient production plans as a menu of fixed and marginal cost pairs. In both environments, we observe convergence to long run competitive equilibrium prices and quantities typically within six long run decision horizons.
| Item Type: | Article |
|---|---|
| Keywords: | Experiment, Double auction, Hayek hypothesis, Long run competitive equilibrium, Bounded rationality. |
| Full text: | (AM) Accepted Manuscript Download PDF (951Kb) |
| Status: | Peer-reviewed |
| Publisher Web site: | https://doi.org/10.1111/ecoj.12249 |
| Publisher statement: | This is the accepted version of the following article: Shachat, J. and Zhang, Z. (2017), The Hayek Hypothesis and Long-run Competitive Equilibrium: An Experimental Investigation. The Economic Journal, 127(599): 199-228, which has been published in final form at https://doi.org/10.1111/ecoj.12249. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving. |
| Date accepted: | 06 February 2015 |
| Date deposited: | 18 December 2014 |
| Date of first online publication: | 05 October 2015 |
| Date first made open access: | 05 October 2017 |
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