Credit cycles in theory and experiment

Antoni Bosch-Domènech and Maria Saez-Marti

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We test in the laboratory the potential of evolutionary dynamics as predictor of actual behavior. To this end, we propose an asymmetric game -which we interpret as a borrowerlender relation-, study its evolutionary dynamics in a random matching set-up, and tests its predictions. The model provides conditions for the existence of credit markets and credit cycles. The theoretical predictions seem to be good approximations of the experimental results.

Keywords: Cycles; evolutionary dynamics; games; experiments; Leex (search for similar items in EconPapers)
JEL-codes: C7 C9 E3 (search for similar items in EconPapers)
Date: 1999-01
New Economics Papers: this item is included in nep-cmp, nep-exp, nep-mic and nep-mon
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:351

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