Replication data for: Does Money Illusion Matter? Comment

Principal Investigator(s):  View help for Principal Investigator(s) Luba Petersen; Abel Winn

Version:  View help for Version V1

Name File Type Size Last Modified
  2011_0570_R2_data 10/19/2021 02:18:PM
LICENSE.txt text/plain 14.6 KB 10/11/2019 05:51:PM

Project Citation: 

Petersen, Luba, and Winn, Abel. Replication data for: Does Money Illusion Matter? Comment. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112741V1

Project Description

Summary:  View help for Summary This paper experimentally investigates whether money illusion generates substantial nominal inertia. Building on the design of Fehr and Tyran (2001), we find no evidence that agents choose high nominal payoffs over high real payoffs. However, participants do select prices associated with high nominal payoffs within a set of maximum real payoffs as a heuristic to simplify their decision task. The cognitive challenge of this task explains the majority of the magnitude of nominal inertia; money illusion exerts only a second-order effect. The duration of nominal inertia depends primarily on participants' best response functions, not the prevalence of money illusion.

Scope of Project

Subject Terms:  View help for Subject Terms Expectations; Experimental Economics; Money Illusion; Nominal Illusion; Strategic Complements; Replication; Adaptive Expectations; Strategic Complementarity; Experimental Design
JEL Classification:  View help for JEL Classification
      C91 Design of Experiments: Laboratory, Individual
      D21 Firm Behavior: Theory
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      E31 Price Level; Inflation; Deflation
      E41 Demand for Money
      E52 Monetary Policy
      L11 Production, Pricing, and Market Structure; Size Distribution of Firms
Data Type(s):  View help for Data Type(s) experimental data
Collection Notes:  View help for Collection Notes Experiments were conducted at Chapman University and UC Santa Cruz using software programmed in REALbasic (now Xojo).

Methodology

Data Source:  View help for Data Source Undergraduate students randomly selected from two sets of volunteers (one set at Chapman University, the other set at UC Santa Cruz).
Unit(s) of Observation:  View help for Unit(s) of Observation Prices, Price Expectations,

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V1 [2019-10-11]

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