An Experimental Investigation of the Patterns of International Trade

Charles Noussair, Charles Plott and Raymond Riezman

Chapter 17 in International Trade Agreements and Political Economy, 2013, pp 299-328 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThis paper studies a laboratory economy with some of the prominent features of an international economic system. The patterns of trade and output predicted by the law of comparative advantage are observed evolving within the experimental markets. Market prices and quantities move in the direction of the competitive equilibrium, but the quantitative predictions of the (risk-neutral) competitive equilibrium are rejected. Considerable amounts of economic activity occur as disequilibria. Factor-price equalization is observed, but there is a universal tendency for factors of production to trade at prices below their marginal products.

Keywords: International Trade; Political Economy; Theory of International Free Trade Agreements; Customs Unions; Tariff Dynamics; Storable Votes (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: An Experimental Investigation of the Patterns of International Trade (1995)
Working Paper: An Experimental Investigation of the Patterns of International Trade
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