An Experimental Test of an Optimal Growth Model
- 1 May 2002
- journal article
- Published by American Economic Association in The American Economic Review
- Vol. 92 (3), 411-433
- https://doi.org/10.1257/00028280260136246
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.Keywords
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