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The 13th BESLab Experimental Economics Summer School in Macroeconomics
Due to the Covid-19 pandemic, we have cancelled the workshop in 2020.
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The aim of this summer school is to introduce young macroeconomists to experimental approaches of research. Macroeconomic theories have traditionally been tested using non-experimental "field" data. However, modern, micro-founded macroeconomic models can also be tested in the laboratory, and researchers are increasingly pursuing such experimental tests. Graduate students and young faculty specializing in macroeconomics or experimental economics are invited to attend this intensive 5-day summer school.
The summer school will be held from June 21 to 27, 2020 at Technische Universität Berlin, Germany.
Due to the Covid-19 pandemic, we have cancelled the event. We hope to organise the next Experimental Economics Summer School in Macroeconomics in 2021 in Berlin.
The general idea of the summer school is the following:
Students will be taught experimental methods and are introduced to various topics of experimental research relevant for macroeconomics, such as growth, labor, monetary exchange, financial crises, equilibrium selection and stability. Students will be asked to participate in experiments and to develop their own experimental macroeconomic projects in groups of 3 or 4 students. Faculty will assist with and critique these projects. The different links on the top of this page will give you access to details regarding the particulars of the summer school in experimental macroeconomics.
The summer school consists of 5 days of teaching with 9-10 lectures of 90 minutes by the faculty, 4-5 experiments, 5 group sessions of 90 minutes each, and a final session in which student groups present their proposals and get comments from the faculty. Faculty members will also help during the group sessions for counseling students. Students can also submit research proposals as part of their summer school application, though this is not a requirement for participation in the summer school. Indeed, one purpose of the summer school is to start new research projects and think of macroeconomic topics and models that can be implemented in the laboratory or in field experiments in a way that advances our knowledge of behavior and our understanding of macroeconomics. Past participants have published articles based on their summer school projects in high-ranked journals.
Lecturers and Organizers
- Gabriele Camera (Chapman University and University of Bologna)
- John Duffy (University of California, Irvine)
- Frank Heinemann (Technische Universität Berlin)
- Rosemarie Nagel (ICREA, Universitat Pompeu Fabra, and Barcelona GSE )
- Luba Petersen (Simon Fraser University)
- Shyam Sunder (Yale University)
- Jasmina Arifovic (Simon Fraser University)
Due to the Covid-19 pandemic, we have cancelled the summer school in 2020.
Gabriele Camera is Professor of Economics and Finance at the Economic Science Institute, Chapman University. He is also Professor of Macroeconomics at University of Bologna on a part-time basis. His research interest spans several areas, including economic theory, experimental economics, industrial organization, labor economics, macroeconomics and monetary economics.
Camera G., and J. Kim. Dynamic directed search. Economic Theory, 62(1), pp. 131-154.
Camera, G., and A. Gioffrè (2014). Game-theoretic foundations of monetary equilibrium. Journal of Monetary Economics 63, 51–63.
Camera, G., and M. Casari (2014). The coordination value of monetary exchange: experimental evidence. American Economic Journal: Microeconomics 6(1), 290–314.
Camera, G., and Y. Chien (2014). Understanding the distributional impact of long-run inflation. Journal of Money, Credit and Banking 46(6), 1137–1170.
Camera, G., M. Casari, and M. Bigoni (2013). Money and trust among strangers. Proceedings of the National Academy of Sciences 110(37), 14889–14893.
John Duffy is Professor of Economics at the University of California, Irvine. Duffy’s research explores issues in macroeconomics and finance using models and laboratory experiments.
"An Experimental Study of Bond Market Pricing" with Matthias Weber and Arthur Schram, Journal of Finance, 73, 2018, 1857-1892.
"Heterogeneous Agent Modeling: Experimental Evidence" with Jasmina Arifovic, in: C. Hommes and B. LeBaron (Eds.), Handbook of Computational Economics Volume 4, Amsterdam: North-Holland, 2018, pp. 491-540.
"Macroeconomics: A Survey of Laboratory Research" in J.H. Kagel and A.E. Roth (Eds.), The Handbook of Experimental Economics Vol. 2, Princeton University Press, 2016, pp. 1-90.
"Gift Exchange versus Monetary Exchange: Theory and Evidence" with Daniela Puzzello, American Economic Review 104, 2014, 1735-1776.
Frank Heinemann is Professor of Macroeconomics at Berlin Institute of Technology, Germany. He earned his PhD in Mannheim in 1996. He has taught macroeconomics and game theory at the universities of Frankfurt am Main, Munich (LMU) and Mannheim and at the German central bank (Bundesbank) before he changed to Berlin in 2006. His main areas of research are monetary macroeconomics and coordination games.
"Experiments on Monetary policy and Central Banking" (with Camille Cornand), in John Duffy (ed.): Experiments on Macroeconomics, Research in Experimental Economics, Vol 17, 2014, pp. 167-227.
"Characterising Equilibrium Selection in Global Games with Strategic Complementarities" (with Christian Basteck and Tijmen Daniëls), Journal of Economic Theory, 148, 2013, pp. 2620-2637.
"Optimal Degree of Public Information Dissemination" (with Camille Cornand), The Economic Journal 118 (April), 2008, pp. 718-742.
"The Theory of Global Games on Test: Experimental Analysis of Coordination Games with Public and Private Information" (with Rosemarie Nagel and Peter Ockenfels), Econometrica 72 (5), 2004, pp. 1583-1599.
Rosemarie Nagel is ICREA research professor at the Universitat Pompeu Fabra (UPF-BGSE), research director of the experimental laboratory (LEEX-UPF), and member of CESifo. She earned her PhD in the European Doctoral Program at the University of Bonn (1994). Her research interest is in experimental economics, behavioural economics, and neuro economics.
"The agencies method for coalition formation in experimental games," (with John Nash Jr, Axel Ockenfels, and Reinhard Selten), Proceedings of the National Academy of Sciences (PNAS), Dec. 11, 2012, 109 (50), 20358-20363.
"Measuring Strategic Uncertainty in Coordination Games" (with Frank Heinemann and Peter Ockenfels), Review of Economic Studies, 76, 2009, pp. 181-221.
"Neural correlates of depth of strategic reasoning in medial prefrontal cortex" (with Giorgio Coricelli), Proceedings of the National Academy of Sciences (PNAS): Economic Sciences,
PNAS June 9, 2009 vol. 106 no. 23 9163-9168
"One, Two, (Three), Infinity...: Newspaper and Lab Beauty-Contest Experiments", (with Antoni Bosch-Domènech, Jose García-Montalvo, and Albert Satorra), American Economic Review December 92 (5), 2002, pp 1687-1701.
Luba Petersen is Associate Professor of Economics at Simon Fraser University. Her research focuses on expectations and decision making in macroeconomic environments. She develops procedures for implementing macroeconomies in controlled laboratory experiments to study policy-relevant questions. Her recent research investigates the ability of monetary policy and central bank communication to stabilize and guide expectations and markets. She is studying the determinants of effective communication to the public as well as financial markets. Another branch of her work explores how people reason through dynamic optimization problems and whether their ability can be improved through effective tools and education. She actively consults for the Bank of Canada on behavioural and experimental macroeconomic topics.
“Deflating asset price bubbles with leverage constraints and monetary policy” (with Guidon Fenig and Mariya Mileva), Journal of Economic Behavior and Organization (2018), vol. 155, 1-27.
“Stabilizing expectations at the zero lower bound: Experimental evidence” (with Jasmina Arifovic), Journal of Economic Dynamics and Control (2017), vol. 82, 21-43.
“Distributing scarce jobs and output: Experimental evidence on the dynamic effects of rationing” (with Guidon Fenig), Experimental Economics (2017), vol. 20, no.3., 707-735.
“Does Money Illusion Matter?: Comment” (with Abel Winn), American Economic Review (2014), vol. 104, no. 3, 1047-1062.
“Recent Developments in Experimental Macroeconomics” (with Robert Amano and Oleksiy Kryvtsov), Bank of Canada Review, Autumn 2014, 1-11.
Shyam Sunder is the James L. Frank Professor of Accounting, Economics, and Finance at the Yale School of Management; Professor in the Department of Economics; and Fellow of the Whitney Humanities Center. His research contributions include financial reporting, dissemination of information in security markets, statistical theory of valuation, and design of electronic markets. He is a pioneer in the fields of experimental finance and experimental macroeconomics. Sunder's current research includes the problem of structuring U.S. and international accounting and auditing institutions to obtain a judicious and efficient balance between regulatory oversight and market competition. He is in the editorial board of Journal of Accounting and Public Policy, Experimental Economics, Indian Accounting Review, Computational & Mathematical Organization Theory.Selected publications:
"Price Bubbles Sans Dividend Anchors: Evidence from Laboratory Stock Markets" (with S. Hirota), Journal of Economic Dynamics and Control, Vol. 31, No. 6, 1875-1909, June, 2007.
"Regulation and the Marketplace" (with K. Jamal and M. Maier), Regulation, Vol. 6 No. 4, Winter 2003-2004.
"Markets as Artifacts: Aggregate Efficiency from Zero-Intelligence Traders" (with M.E. Augier and J.G. March), Models of a Man: Essays in Memory of Herbert A. Simon, Cambridge, MA: MIT Press, 2004.
Jasmina Arifovic is Professor of economics at Simon Fraser University. She received her PhD at the University of Chicago in 1991. Arifovic works on modelling learning and adaptation, and testing the predictions of these models in experiments with human subjects. Her work spans across a number of areas which include macroeconomics, mechanism design and game theory.
"Learning to Believe in Simple Equilibria in a Complex Overlapping Generations Economy" - Evidence from the Lab, joint with C. Hommes and I. Salle, Journal of Economic Theory, Vol. 183, 106-182, 2019.
"Repeated Battle of Sexes: Experimental Evidence and Individual Evolutionary Learning", joint with J. Ledyard, Experimental Economics, 21(3), 692-721, 2018.
"Learning Benevolent Leadership in a Heterogenous Agents Economy" in J. Duffy (Ed.) Experiments in Macroeconomics, Research in Experimental Economics, 17, Bingley, UK: Emerald Group Publishing, 2014.
"Bank Runs as Pure Coordination Failures: Experimental Evidence and Endogenous Learning", joint with J.H. Jiang and Y. Xu, Journal of Economic Dynamics and Control, 37:2446-2465, 2013.
- Monetary Experiments and Economic Growth Experiments:
The lecture is divided into two segments: Monetary Experiments and Economic Growth Experiments. At the start of each segment a brief theory part will develop a theoretical platform for monetary models (first segment of lecture) and classical growth models (second segment of lecture). The second segment will focus on models of representative agents and competitive equilibrium. The first segment will focus on models of strategic interaction and Nash equilibrium, which have been adopted to study a variety of topics including labor, IO, money and finance; this overlap opens the door to exploring related applications, such as cooperation, collusion, trust, equilibrium selection, coordination.
The main goals are: (1) To review basic techniques used in theoretical modeling of growth and of money; (2) To study how those models have been brought to the lab, (3) To understand the insights emerging from recent experimental applications. At the end of the course students will possess an expanded set of tools, which will be helpful to read critically the literature and to engage independent research.
The papers listed in the Literature below are in addition to relevant papers that are already covered elsewhere in the workshop.
- General literature
Bigoni, M., G. Camera, and M. Casari (2014). Money is more than memory. Economic Science Institute working paper # 14-17
Bigoni, M., G. Camera, and M. Casari (2015). Money and the scale of cooperation. Economic Science Institute working paper # 15-28
Camera, G., and M. Casari (2009). Cooperation among strangers under the shadow of the future. American Economic Review 99(3), 979–1005.
Camera, G., M. Casari, and M. Bigoni (2013). Experimental Markets with Frictions. Journal of Economic Surveys 27(3), 536–553.
Camera, G., M. Casari, and M. Bigoni (2013). Money and trust among strangers. Proceedings of the National Academy of Sciences 110(37), 14889-14893.
Camera, G., and M. Casari (2014). The coordination value of monetary exchange: experimental evidence. American Economic Journal: Microeconomics 6(1), 290-314.
Diamond P., (1982). Aggregate Demand Management in Search Equilibrium. Journal of Political Economy 90, 881‑894.
Duffy, John (forthcoming). Macroeconomics: A Survey of Laboratory Research. In: Handbook of Experimental Economics, volume 2, John Kagel and Al Roth editors.
Ellison, Glenn (1994). Cooperation in the prisoner's dilemma with anonymous random matching. Review of Economic Studies, 61, 567-88.
Kandori, Michihiro (1992). Social norms and community enforcement. Review of Economic Studies, 59, 63-80.
Kocherlakota, N. (1998). Money is memory. Journal of Economic Theory 81, 232-251
Lei V., and C. Noussair (2002). An Experimental Test of an Optimal Growth Model. American Economic Review 92(3), 549-570.
Capra, M., C. Camerer, T. Tanaka, L. Feiler, V. Sovero, and C. Noussair (2009). The Impact of Simple Institutions in Experimental Economies with Poverty Traps. Economic Journal 119(539), 977 - 1009.
Smith, Vernon L. (1994). Economics in the Laboratory. Journal of Economic Perspectives 8(1), 113-131
Townsend, R. (1980). Models of Money with Spatially Separated Agents. In Models of Monetary Economies, J. Kareken and N. Wallace editors, p. 265-303
- Overview of Macroeconomic Experiments
This lecture will expose participants to the breadth of macroeconomic topics and questions that have been explored using laboratory methods. The aim of this lecture will be to stimulate thinking about ideas for new projects that build on what has already been done. In addition, participants will be encouraged to extend laboratory methods to macroeconomic models or questions that have not been previously addressed. Methodological issues that are particularly relevant to macroeconomic experiments, e.g., implementation of discounting and infinite horizons, will also be addressed.
Duffy, J. (2016), "Macroeconomics: A Survey of Laboratory Research" in J.H. Kagel and A.E. Roth (Eds.), The Handbook of Experimental Economics Vol. 2, Princeton: Princeton University Press, 2016, pp 1-90.
Consumption Smoothing and Asset Pricing
In this lecture we will consider the experimental evidence on intertemporal consumption and savings decisions. In particular, we ask whether agents intertemporally smooth consumption as predicted by standard lifecycle models. We will explore some behavioral explanations for departures from this rational choice prediction. In addition, we will look at the pricing of assets which play an important role in intertemporal consumption smoothing. We will explore several experimental tests of asset pricing models and explanations for why asset prices often appear to depart from fundamental values.
Ballinger, T.P., M.G Palumbo, and N.T. Wilcox, “Precautionary Saving and Social learning Across Generations: An Experiment,” The Economic Journal, 2003, 113 (490), 920–947.
Brown, Alexander L, Zhikang Eric Chua, and Colin Camerer, “Learning and Visceral Temptation in Dynamic Savings Experiments,” Quarterly Journal of Economics, 2009, 124 (1), 197–231.
Carbone, E. and J.D. Hey, “The effect of Unemployment on Consumption: an Experimental Analysis,” The Economic Journal, 2004, 114 (497), 660–683.
Duffy, J. and Y. Li “Lifecycle Consumption Under Different Income Profiles: Experimental Evidence” working paper, UC Irvine, 2018.
V.L. Smith, G.L. Suchanek and A.W. Williams, “Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets”, Econometrica 56, 1988, 1119-1151.
V. Lei, C.N. Noussair and C.R. Plott, “Nonspeculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality vs. Actual Irrationality,” Econometrica 69, 2001, 831-859.
Michael Kirchler Jürgen Huber Thomas Stöckl, “Thar She Bursts: Reducing Confusion Reduces Bubbles”, American Economic Review, 2012, 865-83.
Bao, T., J. Duffy and C. Hommes, “Learning, Forecasting and Optimizing: An Experimental Study” European Economic Review, Vol. 61, 2013, 186-204.
Crockett, S., Duffy J. and Y. Izhakian , “An Experimental Test of the Lucas Asset Pricing Model” forthcoming in the Review of Economic Studies.
- Understanding Financial Crises: The Contribution of Experimental Economics
The patterns of financial crises are remarkably predictable. Minsky (1972) has described these patterns by phases, some of which contain behavioural hypotheses that can be tested by laboratory experiments. Under which conditions can bubbles arise? When do they burst? Why do people herd and does herding destabilize financial markets? What triggers a bank run and how do people coordinate in an environment with multiple equilibria? This lecture will lay out experimental evidence containing some answers to these questions. In particular, we will look at experiments on games with strategic complementarities. How predictable are choices if the game has multiple equilibria and which theory is well-suited to give advice for individual behavior? Managing information flow is one of the major challenges for central banks and bank supervisors. The lecture explains what we can learn from experiments for managing information flow in the presence of strategic complementarities.
Minsky, H.P. (1972), Financial Instability Revisited: the Economics of Disaster
Brunnermeier, Markus, and John Morgan (2008), Clock Games: Theory and Experiments, Games and Economic Behavior, forthcoming, http://www.princeton.edu/~markus/research/papers/clock_games.pdf
Kübler, Dorothea, and Georg von Weizsäcker (2004), Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory, Review of Economic Studies 71, 425-442.
Schotter, Andrew, and Tanju Yorulmazer (2009), On the Severity of Bank Runs, Journal of Financial Intermediation 18, 217-241.
Heinemann, Frank, Rosemarie Nagel, and Peter Ockenfels (2009), Measuring Strategic Uncertainty in Coordination Games, Review of Economic Studies 76, 181-221.
Cornand, C., and F. Heinemann (2010), Measuring Agents' Reaction to Private and Public Information in Games with Strategic Complementarities, CESifo Working Paper 2947
Heinemann, Frank (2012), Understanding Financial Crises: The Contribution of Experimental Economics, Annals of Economics and Statistics, 107-108, 2012, pp. 7-29,
- Speculative Attacks and the Theory of Global Games - Experimental Tests of Global Game Predictions
Speculative attacks can be viewed upon as coordination games: if a sufficient number of traders (and a sufficient amount of capital) is involved in an attack, the pressure on foreign exchange markets forces the central bank to devaluate its currency. Then, all attacking traders gain from the devaluation. But, if the number of attackers is too small, the central bank can defend the peg, and attacking traders lose on transaction costs. Speculative-attack games have multiple equilibria if payoff functions are common knowledge. The theory of global embeds a coordination game in an environment with private information about parameters of the payoff function. If private information is sufficiently precise, the global game has a unique equilibrium. Hence, the theory of global games can be used for a unique prediction of the outcome of a speculative-attack game. This theory provides a number of hypotheses that can be tested in laboratory experiments. This lecture first presents some of the theoretical background and derives testable hypotheses. Then, it explains experiments that have been used for these tests and shows how they have been analyzed.
Heinemann, Frank (2002), "Exchange-Rate Attack as a Coordination Game: Theory and Experimental Evidence," Oxford Review of Economic Policy 18, 462-478.
Obstfeld, Maurice (1997), "Destabilizing Effects of Exchange-Rate Escape Clauses," Journal of International Economics, 61-77.
Carlsson, Hans and Eric van Damme (1993), "Global Games and Equilibrium Selection," Econometrica 61, 989-1018.
Morris, S., and H.S. Shin (1998), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review, 88, 587-597.
Heinemann, Frank (2000), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks: Comment," American Economic Review 90, 316-318.
Hellwig, Christian (2002), "Public Information, Private Information, and the Multiplicity of Equilibria in Coordination Games," Journal of Economic Theory 107, pp. 191-222.
Heinemann, F., R. Nagel, and P. Ockenfels (2004), "The Theory of Global Games on Test: Experimental Analysis of Coordination Games with Public and Private Information," Econometrica 72 (5), 2004, pp. 1583-1599.
Cornand C. (2006), "Speculative Attacks and Informational Structure: An Experimental Study," Review of International Economics 14, 797-817.
This lecture introduces the methods of experimental economics. We will discuss what is an economic experiment (field vs lab experiment), the different areas in experimental economics and behavioral economics, the link between experimental economics, theory and empirical work, important design issues, and the link between micro and macro experiments. All this will be discussed with the classical Keynesian Beauty Contest game. This introduction is meant to give a quick introduction to those who have never followed an experimental economic course. Prior to the course we will send the participants of the summer school some classical experiments which they can do online.
- General literature :
Akerlof, G.A. (2002), "Behavioral Macroeconomics and Macroeconomic Behavior, "American Economic Review," 92. 411-433.
Handbook of Experimental Economics, Vol1 (1995), Vol2 (2016), editors J. Kagel &A. Roth
Camerer, C. (2003), "Behavioral Game Theory," Princeton University Pre2016ss
Friedman, D. and Sunder, S. (1994), Experimental Methods. Cambridge Univ. Press: Chapters 1-2: 1-20.
Plott, C. and Smith, V. (2003), Handbook of Experimental Economics Results, North-Holland, Amsterdam.
Smith, V.L. (2002), "Method in Experiment: Rhetoric and Reality." Experimental Economics 5(2): 91-110.
Special issue (2005), Experiment, Theory, World: A Symposium on the Role of Experiments in Economics. Journal of Economic Methodology 12(2).
Papers related to the Beauty Contest game
Camerer, C. F. (2003). Chapter 5, Dominance Solvable Games. Behavioral game theory: Experiments on strategic interaction. Princeton, Princeton University Press.
Vincent P. Crawford, Miguel A. Costa-Gomes, and Nagore Iriberri (2012) "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," forthcoming in Journal of Economic Literature. http://weber.ucsd.edu/~vcrawfor/CGCIJEL4April12
Antoni Bosch-Domènech , Jose García-Montalvo, Rosemarie Nagel, and Albert Satorra, "One, Two, (Three), Infinity...: Newspaper and Lab Beauty-Contest Experiments", American Economic Review December 92 (5), 2002, pp 1687-1701.
Giorgio Coricelli, Rosemarie Nagel, "Neural correlates of depth of strategic reasoning in medial prefrontal cortex" Proceedings of the National Academy of Sciences (PNAS): Economic Sciences, PNAS June 9, 2009 vol. 106.
Nagel Rosemarie (1995), "Unraveling in Guessing Games: An Experimental Study." American Economic Review 85,5 1313-1326.
Monetary Policy Experiments
In this lecture, we will explore how laboratory experiments can be used to inform the design and implementation of monetary policy. We will begin by reviewing the various approaches to studying the effects of monetary policy (theory, computational, empirics, experiments), and considering their strengths and weaknesses. Different experimental approaches to studying monetary policy will be considered (individual choice experiments, coordination experiments involving expectations and real decisions), followed by a survey of the literature and findings. An important question is: why does monetary policy not work better? Are there cognitive limitations that inhibit the public's ability to respond to monetary policy? Or does the weak
transmission of monetary policy stem from an inability to coordinate. We will consider empirical and experimental evidence on the transmission of monetary policy, and possible directions forward for research.
Walsh, C. E. (2017). Monetary theory and policy. MIT Press.
Woodford, M. (2011). Interest and prices: Foundations of a theory of monetary policy. Princeton University Press.
Adam K. (2007), “Experimental Evidence on the Persistence of Output and Inflation,” Economic Journal 117, 603–635.
Arifovic, J. and L. Petersen (2017). “Stabilizing expectations at the zero lower bound: Experimental evidence”, Journal of Economic Dynamics and Control, 82, 21-43.
Arifovic J. and T. J. Sargent (2003), “Laboratory Experiments with an Expectational Phillips Curve,“ in D. E. Altig, and B. D. Smith (eds.), Evolution and Procedures in Central Banking,
Cambridge University Press, Cambridge. Arifovic J. and J. H. Jiang (2013), "Experimental Evidence of Sunspot Bank Runs," mimeo Bank of Canada.
Assenza, T., Heemeijer, P., Hommes, C., & Massaro, D. (2013). Individual expectations and aggregate macro behavior.
Bernasconi M. and O. Kirchkamp (2000), “Why do monetary policies matter? An experimental study of saving and inflation in an overlapping generations model,” Journal of Monetary Economics 46, 315‐ 343.
Blinder A. S. and J. Morgan (2005), “Are Two Heads Better than One? Monetary Policy by Committee,” Journal of Money, Credit, and Banking 37, 789‐812. Blinder A. S. and J. Morgan (2008), “Leadership in Groups: A Monetary Policy Experiment,” International Journal of Central Banking 4(4), 117‐150.
Bosch‐Domenech A. and J. Silvestre (1997), “Credit Constraints in a General Equilibrium: Experimental Results,” Economic Journal 107, 1445‐1464.
Cornand, C., & M'baye, C. K. (2016). Does inflation targeting matter? an experimental investigation. Macroeconomic Dynamics, 1-40.
Engle‐Warnick J. and Turdaliev N. (2010), “An Experimental Test of Taylor‐Type Rules with Inexperienced Central Bankers,” Experimental Economics 13, 146‐166.
Fehr E. and J.‐R. Tyran (2001), “Does Money Illusion Matter?,” American Economic Review 91, 1239‐ 1262.
Fehr E. and J.R. Tyran (2005), “Individual Irrationality and Aggregate Outcomes," Journal of Economic Perspectives 19, 43‐66.
Fehr E. and J.‐R. Tyran (2008), “Limited Rationality and Strategic Interaction: The Impact of the Strategic Environment on Nominal Inertia,” Econometrica 76, 353‐394.
Fehr E. and J.‐R. Tyran (2014), “Does Money Illusion Matter?: Reply,” American Economic Review 104, 1063‐1071.
Fenig, G., Mileva, M., & Petersen, L. (2018). Deflating asset price bubbles with leverage constraints and monetary policy. Journal of Economic Behavior and Organization, 155, 1-27.
Fischbacher, U., Hens, T., & Zeisberger, S. (2013). The impact of monetary policy on stock market bubbles and trading behavior: Evidence from the lab. Journal of Economic Dynamics and Control, 37(10), 2104-2122.
Kryvtsov O and L. Petersen (2013), “Expectations and Monetary Policy: Experimental Evidence,” Bank of Canada Working Paper.
Lian P. and C. Plott (1998), “General Equilibrium, Markets, Macroeconomics and Money in a Laboratory Experimental Environment,” Economic Theory 12, 21‐75.
Noussair C. N., D. Pfajfar and J. Zsiros (2014), “Frictions, Persistence, and Central Bank Policy in an Experimental Dynamic Stochastic General Equilibrium Economy,” in J. Duffy (eds.), “Experiments in Macroeconomics”, Research in Experimental Economics 17, Emerald Press.
Petersen L. and A. Winn (2014), “Does money illusion matter?: Comment,” American Economic Review 104, 1047‐1062.
Pfajfar, D., & Žakelj, B. (2016). Inflation expectations and monetary policy design: Evidence from the laboratory. Macroeconomic Dynamics, 1-41.
- Complexity and Abstraction: Designing Macro Experiments
Relevant real world phenomena and relevant models of interest serve as two important benchmarks in designing laboratory experiments. With their fractal structure, phenomena in field are endlessly complex. Accordingly, realism (i.e., fidelity to the field environment) and theory (i.e., fidelity to the model) place important, often conflicting, demands on design of laboratory experiments. Do the details matter? Which ones do? How do we find out? Why do the details that "do not matter" exist in the field? If they are just matters of refinement, which refinements are and are not to be ignored in laboratory? How generalizable are the laboratory findings? How does an experimenter find his way through this maze that connects limitless complexity of the field to simple tidy models of economics to gain a better understanding of economic phenomena? We shall explore the practical problems of identifying interesting questions, and developing experimental designs to address them using some examples, notes, and some macro experiments.
Sunder, Shyam. "Determinants of Economic Interaction: Behavior or Structure."Journal of Economic Interaction and Coordination 1, no. 1 (May 2006): 21-32. Text (PDF).
Sunder, Shyam. "Real Phenomena, Theory and Design of Laboratory Experiments in Economics." Notes. Text (PDF).
Lim, Suk S., Edward C. Prescott and Shyam Sunder. "Stationary Solution to the Overlapping Generations Model of Fiat Money: Experimental Evidence." Empirical Economics 19, no. 2 (1994): 255-277. Text (PDF)
Marimon, Ramon and Shyam Sunder. "Indeterminacy of Equilibria in a Hyperinflationary World: Experimental Evidence." Econometrica 61, no. 5 (1993): 1073-1108. Text (PDF).
Marimon, Ramon and Shyam Sunder. "Expectations and Learning Under Alternative Monetary Regimes: An Experimental Approach." Economic Theory 4 (1994), 131-162. Text (PDF)
Huber, Juergen, Martin Shubik, and Shyam Sunder. "Financing of Public Goods through Taxation in a General Equilibrium Economy: Theory and Experimental Evidence," Cowles Foundation Discussion Paper 1830, October 23, 2011.
Huber, Juergen, Martin Shubik and Shyam Sunder. "Sufficiency of an Outside Bank and a Default Penalty to Support the Value of Fiat Money: Experimental Evidence." Cowles Foundation Discussion Paper No. 1675, Revised June 12, 2011.
- Experiments with Minimally Intelligent Agents and Minimal Institutions
Laboratory exploration of properties of economic institutions and policies has traditionally been done using profit motivated human traders. Outcomes of such experiments, when compared with outcomes of identical economies populated with minimally intelligent algorithmic agents yield valuable insights. We can isolate which of the properties of the economies of interest arise from their structure, and which ones are attributable to the behavior of agents. Starting with three micro applications, we shall study three macro applications of this human-algorithm hybrid approach to experimentation.
Gode, Dhananjay K. and Shyam Sunder. "Allocative Efficiency of Markets with Zero Intelligence Traders: Market as a Partial Substitute for Individual Rationality." The Journal of Political Economy 101, no. 1 (February 1993): 119-137.Text (PDF).
Gode, Dhananjay K., and Shyam Sunder. "Double Auction Dynamics: Structural Effects of Non-Binding Price Controls."Journal of Economic Dynamics and Control 28, no. 9 (July 2004): 1707-1731. Abstract(PDF), Text (PDF).
Huber, Juergen, Martin Shubik and Shyam Sunder. "Three Minimal Market Institutions: Theory and Experimental Evidence."Games and Economic Behavior 70 (2010) 403-424.
Angerer, Martin, Juergen Huber, Martin Shubik and Shyam Sunder. "An Economy with Personal Currency: Theory and Experimental Evidence." Annals of Finance, Volume 6, Number 4, October 2010, pp.475-509.
Huber, Juergen, Martin Shubik and Shyam Sunder. "Default Penalty as a Selection Mechanism Among Multiple Equilibria."Cowles Foundation Discussion Paper 1730R, Revised February 6, 2011.
How to participate
Due to the Covid-19 pandemic, we have cancelled the summer school in 2020.
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The 13th BESLab Experimental Economics Summer School in Macroeconomics
Technische Universität Berlin, Germany, June 21-27, 2020
Address: Straße des 17. Juni 135, 10623 Berlin, Germany
Telephone number: +01 +49 30 3140