infonet-economy

We test in the laboratory the potential of evolutionary dynamics as predictor of actual behavior. To this end, we propose an asymmetric game (which we interpret as a borrower–lender relation), we study its evolutionary dynamics in a random matching setup, and we test its predictions. The theoretical model provides conditions for changes in qualitative aggregate behavior in response to variations in structural parameters. While it turns out that Nash equilibrium is not a reliable predictor of average aggregate behavior, the experiment seems to confirm the qualitative predictions of the evolutionary model under structural changes. Journal of Economic Literature Classification Numbers: C7, C9, E3.