Fragility of Comparative Advantage in Higher Dimensions: An Experimental Investigation
Abstract
In this study, an experimental analysis of the fragility of the law of the comparative advantage in higher dimensions is performed. Noussair et al (1995) invoked a trading environment similar to the 2 x 2 Competitive Ricardian Model (CRM) and observed the law of comparative advantage. In this experiment, the same experimental setting is invoked however the number of goods and countries is increased. There were three countries and three goods, two countries were categorised as ‘intermediate’ comparative advantage while one as ‘extreme’ comparative advantage. However, the Jones (1961)’s criterion for optimal assignment was satisfied. The experimental findings reveal the following (1) both the autarky model and the competitive model are rejected as a representation of the data but the competitive model performs better than the autarky model (2) the CRM does not predict the production pattern (3) the CRM does not predict pattern of trade (4) output prices do not converge to the prediction of the theoretical model. Thus the results support the claim of Deardoff (2005).Downloads
Copyright (c) 2011 Journal of Economics and Behavioral Studies
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of a revised paper in the light of suggestions of the reviewers, editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
