The commitment effect in belief evolution
In this note we establish that rational demand expectations will typically not evolve in an evolutionary model. In an evolutionary model, beliefs act like a commitment device to more aggressive behavior. This commitment effect has the same direction for strategic substitutes and complements and fades away in large markets.
Year of publication: |
2003-06
|
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Authors: | Gehrig, Thomas ; Güth, Werner ; Levínský, René |
Institutions: | Max-Planck-Institut für Ökonomik, Max-Planck-Gesellschaft |
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