Does Money Illusion Matter?: Comment

• 成果类型: Article
• 署名作者: Petersen, Luba; Winn, Abel
• 署名单位: Simon Fraser University; Chapman University System; Chapman University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.104.3.1047
• 发表日期: 2014
• 页码: 1047-1062
• 关键词: Focal points; POLICY; games

摘要

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.