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.
|Keywords:||Experiment, Double auction, Hayek hypothesis, Long run competitive equilibrium, Bounded rationality.|
|Full text:||(AM) Accepted Manuscript|
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|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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