TY  - CHAP
AB  - Abstract This article describes an experiment in a Kydland/Prescott type of environment with cheap talk. Individual evolutionary learning (IEL) acts as a policy maker that makes inflation announcements and decides on actual inflation rates. IEL evolves a set of strategies based on the evaluation of their counterfactual payoffs measured in terms of disutility of inflation and unemployment. Two types of private agents make inflation forecasts. Type 1 agents are automated and they set their forecast equal to the announced inflation rate. Type 2 agents are human subjects who submit their inflation forecast and are rewarded based on their forecast error. The fraction of each type evolves over time based on their performance. Experimental economies result in outcomes that are better than the Nash equilibrium. This article is the first to use an automated policy maker that changes and adapts its rules over time in response to the environment in which human subjects make choices.
VL  - 17
SN  - 978-1-78441-195-4, 978-1-78441-194-7/0193-2306
DO  - 10.1108/S0193-230620140000017007
UR  - https://doi.org/10.1108/S0193-230620140000017007
AU  - Arifovic Jasmina
PY  - 2014
Y1  - 2014/01/01
TI  - Evolving Better Strategies for Central Bank Communication: Evidence from the Laboratory
T2  - Experiments in Macroeconomics
T3  - Research in Experimental Economics
PB  - Emerald Group Publishing Limited
SP  - 229
EP  - 258
Y2  - 2024/05/06
ER  -