Essays in experimental macroeconomics

This dissertation consists of four essays that use controlled experiments to address macroeconomic issues. Chapter 1 (coauthored with Camille Cornand and Adam Zylbersztejn) investigates the robustness of experience effects in laboratory experiments. We compare two scenarios in a beauty-contest game characterized by strategic complementarity: A baseline in which the same shock hits the economy four times, and a treatment in which the shocks are heterogeneous. We find that convergence to equilibrium accelerates with each shock in both scenarios. We then run a horse-race exercise between models of expectation formation. Chapter 2 (coauthored with David Hales, Patrick Julius, and Weiwei Tasch) examines the sources of asymmetric price transmission. We show that prices respond asymmetrically to cost shocks in laboratory markets where subjects act as producers and demand is computerized. We show that subjects engage in tacit collusion, which is accentuated after negative shocks and is not expectation driven. Increasing the number of competitors from 3 to 10 does not significantly change the degree of asymmetry. Chapter 3 (coauthored with Lisa Bruttel, Camille Cornand, Adam Zylbersztejn, and Frank Heinemann) develops an experimental method for measuring strategic uncertainty attitudes. We compare certainty equivalents and beliefs across lotteries where the payoff depends on either the outcome of a stag-hunt game, a market-entry game, an ambiguous lottery, or a risky lottery. We use a model to determine whether participants exhibit optimism/pessimism or strategic-uncertainty aversion/seeking. We find that the median player is pessimistic in the stag-hunt game and optimistic in the entry game, but neutral toward strategic uncertainty. Chapter 4 employs survey experiments to measure German households’ beliefs about the European Central Bank’s inflation forecasts. I find that the accuracy of these forecasts is severely underestimated. Information treatments are effective in changing inflation expectations and uncertainty. A causal mechanism analysis shows that intervention increases trust in the central bank, which in turn changes inflation expectations. Chapter 5 concludes with a discussion of these results.

Author dc:creator

• Bulutay, Muhammed

Advisor dc:contributor.advisor

• Heinemann, Frank

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

en

Identifier URI

https://doi.org/10.14279/depositonce-21000

OAI identifier oai:identifier

oai:depositonce.tu-berlin.de:11303/22199