Neutrality by Aggregation

A price-posting game is designed to examine whether monetary neutrality may hold in a lab environment. In the game, if the trading process is costless, sellers post the same price in equilibrium; otherwise, there are many mixed-strategy equilibria where sellers randomize over different prices. The trading process being costly or not, neutrality holds in the lab at the aggregate level but, when the trading process is costly, non-neutrality presents a disaggregate level and, in particular, neutrality observed at the aggregation level is not because of random errors offsetting each other but because of systematic errors offsetting each other.