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Bounded Rationality and Correlated Equilibria

Germano, Fabrizio; Zuazo-Garin, Peio - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

We study an interactive framework that explicitly allows for non-rational behavior. We do not place any restrictions on how players can deviate from rational behavior. Instead we assume that there exists a lower bound p 2 [0; 1] such that all players play and are believed to play rationally with...

Persistent link: https://www.econbiz.de/10011188510

Uncertain Rationality and Robustness in Games with Incomplete Information

Germano, Fabrizio; Zuazo-Garin, Peio - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

Economic predictions are highly sensitive to model and informational specifications. Weinstein and Yildiz (2007) show that, in static games with incomplete information, only very weak predictions, namely, the interim correlated rationalizable (ICR) actions, are robust to higher-order belief...

Persistent link: https://www.econbiz.de/10011196334

Incomplete Information and Small Cores in Matching Markets

Ehlers, Lars; Massó, Jordi - Barcelona Graduate School of Economics (Barcelona GSE) - 2004

We study Bayesian Nash equilibria of stable mechanisms in centralized matching markets under incomplete information. We show that truth-telling is a Bayesian Nash equilibrium of the revelation game induced by a common belief and a stable mechanism if and only if all the profiles in the support...

Persistent link: https://www.econbiz.de/10010547455

Two-sided Learning in New Keynesian Models: Dynamics, (Lack of) Convergence and the Value of Information

Matthes, Christian; Rondina, Francesca - Barcelona Graduate School of Economics (Barcelona GSE) - 2012

This paper investigates the role of learning by private agents and the central bank (two-sided learning) in a New … these beliefs through a statistical learning algorithm as new information becomes available. We study the short-run dynamics … demonstrate that two-sided learning can generate substantial increases in volatility and persistence, and alter the behavior of …

Persistent link: https://www.econbiz.de/10011132910

Stock Market Volatility and Learning

Adam, Klaus; Marcet, Albert; Nicolini, Juan Pablo - Barcelona Graduate School of Economics (Barcelona GSE) - 2014

Consumption based asset pricing models with time-separable preferences can generate realistic amounts of stock price volatility if one allows for small deviations from rational expectations. We consider rational investors who entertain subjective prior beliefs about price behavior that are not...

Persistent link: https://www.econbiz.de/10011166116

Stock Price Booms and Expected Capital Gains

Adam, Klaus; Marcet, Albert; Beutel, Johannes - Barcelona Graduate School of Economics (Barcelona GSE) - 2015

The booms and busts in U.S. stock prices over the post-war period can to a large extent be explained by fluctuations in investors' subjective capital gains expectations. Survey measures of these expectations display excessive optimism at market peaks and excessive pessimism at market troughs....

Persistent link: https://www.econbiz.de/10011194310

Are Agent-based Simulations Robust? The Wholesale Electricity Trading Case

Banal-Estañol, Albert; Rupérez-Micola, Augusto - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

-response and reinforcement learning but not under ﬁctitious play. The simulations perform well underﬂat and upward-slopping supply … bidding, and also for plausible demand elasticity assumptions. Learning is inﬂuenced by the number of bids per plant and the …

Persistent link: https://www.econbiz.de/10010851424

Abbink, Klaus; Brandts, Jordi - Barcelona Graduate School of Economics (Barcelona GSE)

Bertrand competition under decreasing returns involves a wide interval of pure strategy equilibrium prices. We first present results of experiments in which two, three and four identical firms repeatedly interact in this environment. Less collusion with more firms leads to lower average prices....

Persistent link: https://www.econbiz.de/10010851468

The role of model uncertainty and learning in the U.S. postwar policy response to oil prices

Rondina, Francesca - Barcelona Graduate School of Economics (Barcelona GSE) - 2010

approach proposed by Cogley and Sargent (2005b) to incorporate model uncertainty and learning into policy decisions. In this …

Persistent link: https://www.econbiz.de/10010547167

First Impressions Matter: Signalling as a Source of Policy Dynamics

Hansen, Stephen; McMahon, Michael - Barcelona Graduate School of Economics (Barcelona GSE) - 2011

with experience. We then reject increasing confidence in private information or learning about the structure of the …

Persistent link: https://www.econbiz.de/10010547194