Complements and substitutes in a dynamic consumption-asset economy: A laboratory experiment.

We examine a general equilibrium model with an asset and consumption good with specific steady-state competitive equilibrium properties. Two specific environments are considered in our modeling: the asset is a substitute (the asset can be immediately consumed or stored for later use) or a complement (the asset is not for immediate consumption but produces consumption goods in later periods). We test our model through a series of market experiments. We find that markets help extract a large amount of the surplus. However, markets do not realize the full surplus due to over-trading in the asset market, especially when the asset is a substitute. [ABSTRACT FROM AUTHOR]