An Experimental Investigation of the Patterns of International Trade

Abstract

This study is the first attempt to create and study a laboratory economy with some of the prominent features of an international economic system. The concept of multiple "countries" in which each country has its own technology, preferences and resource endowments, is introduced and operationalized. The questions posed in the study are related to the law of comparative advantage, factor price equalization, terms of trade, efficiency in production and exchange as guided by multiple and interacting markets and the effects of tariffs on international transactions. The study builds on previous work in the experimental study of general equilibrium phenomena.

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Date of WP not provided. [1991 based on clues within document.] The authors wish to acknowledge the financial support of the National Science Foundation and the Caltech Laboratory for Experimental Economics and Political Science. The authors also thank Charles Holt for his comments as the discussant of this paper at the meetings of the Allied Social Science Association in New Orleans, January, 1992. Published as Noussair, Charles N., Charles R. Plott, and Raymond G. Riezman. "An experimental investigation of the patterns of international trade." The American Economic Review (1995): 462-491. Published again as Chapter 17 in International Trade Agreements and Political Economy, 2013, pp 299-328 from World Scientific Publishing Co. Pte. Ltd.

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