Replication data for: Does Money Illusion Matter? Comment
- Petersen, Luba
- Winn, Abel
AbstractThis 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.
Is supplement to
DOI: 10.1257/aer.104.3.1047 (Text)
Petersen, Luba, and Abel Winn. “Does Money Illusion Matter?: Comment.” American Economic Review 104, no. 3 (March 2014): 1047–62. https://doi.org/10.1257/aer.104.3.1047.
- ID: 10.1257/aer.104.3.1047 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-12