Empirical estimations of the New Keynesian Phillips curve support hybrid versions with a positive weight on lagged inflation and a weight less than one on expected inflation. We argue that myopic price setting of some agents explains the low weight on expected inflation. The lagged term can be...

[enter Abstract Body]The central thesis of the Phillips Curve is that inflation leads to less unemployment. The link between inflation and employment has been tested empirically many times using econometrics but never by behavioral science. The purpose of this paper is to use behavioral science...

We experimentally test the price-setting behavior of firms in the Rotemberg (1982) model in order to explain puzzles in the New Keynesian Phillips curve (NKPC). By constructing categories and a quantitative measure that compare behavior with optimum we find heterogeneous price-setting behavior...