We use cookies to ensure that we give you the best experience on our website. By continuing to browse this repository, you give consent for essential cookies to be used. You can read more about our Privacy and Cookie Policy.

Durham Research Online
You are in:

The Hayek hypothesis and long run competitive equilibrium : an experimental investigation.

Shachat, J. and Zhang, Z. (2017) 'The Hayek hypothesis and long run competitive equilibrium : an experimental investigation.', Economic journal., 127 (599). pp. 199-228.


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
Publisher Web site:
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 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

Save or Share this output

Look up in GoogleScholar