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Optimal Monetary Policy under Heterogeneous Expectations
Gomes, Orlando - EconWPA - 2004
Monetary policy has an important role in the determination of the inflation rate and the output gap time trajectories. Monetary authorities should choose the nominal interest rate time path that best serves the goals of price stability (primarily) and output growth (as a consequence of the...
Persistent link: https://www.econbiz.de/10005126273
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THE ACCOUNTING VARIABLE AND STOCK PRICE DETERMINATION
salvary, stanley c. w. - EconWPA - 2005
Several tests have been conducted to determine which valuation model best fits stock price data. Given very little success, those studies suggest the need for a clear understanding of the market process of stock price determination. This paper advances the concepts of product costing and product...
Persistent link: https://www.econbiz.de/10005134873
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The Weakest Link - A Field Experiment in Rational Decision Making
Haan, Marco; Los, Bart; Riyanto, Yohanes; Geest, Martin van - EconWPA - 2002
We analyze the BBC TV game show "The Weakest Link", using data from 77 episodes, covering 13,380 questions. We focus on the banking decision, where a contestant chooses to secure an amount of money for the eventual winner, or to risk it on a general knowledge question. In the latter case, should...
Persistent link: https://www.econbiz.de/10005125587
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Volatility, Heterogeneous Agents and Chaos
Gomes, Orlando - EconWPA - 2004
explained. Adding to a system with initial behavior heterogeneity an adaptive learning rule based on discrete choice theory, one …
Persistent link: https://www.econbiz.de/10005125624
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Heterogeneous Researchers in a Two-Sector Representative Consumer Economy
Gomes, Orlando - EconWPA - 2004
Research activities have uncertain outcomes. The question asked in this paper is whether or not this uncertainty can be a central piece on the explanation of long run consumption growth paths. More specifically, we inquire how the existence of different research projects, with different degrees...
Persistent link: https://www.econbiz.de/10005125685
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Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making
Fryer, Roland G.; Jackson, Matthew O. - EconWPA - 2002
This paper introduces a psychological notion of categorization into economics and derives its implications for economic decision making. We show, using a tractable model of social cognition, that a decision maker in (efficiently) assigning past experiences to categories, will sort experiences of...
Persistent link: https://www.econbiz.de/10005135029
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Matching games with partial information
Zhang, Paolo Laureti Yi-Cheng - EconWPA - 2003
We analyze different ways of pairing agents in a bipartite matching problem, with regard to its scaling properties and to the distribution of individual ``satisfactions''. Then we explore the role of partial information and bounded rationality in a generalized {\it Marriage Problem}, comparing...
Persistent link: https://www.econbiz.de/10005062392
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From Bounded Rationality to Behavioral Economics
Egidi, Massimo - EconWPA - 2005
The paper provides an brief overview of the “state of the art” in the theory of rational decision making since the 1950 … normative interpretation of decision-making theory is therefore questioned, and the two challenging views against this approach … , Simon’s bounded rationality and Allais’ criticism to expected utility theory are discussed. On this ground it is shown that …
Persistent link: https://www.econbiz.de/10005408218
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A Continuous-Time Asset Pricing Model with Boundedly Rational Heterogeneous Agents
Gomes, Orlando - EconWPA - 2004
Asset prices are forward looking. This evidence implies that prices of financial assets are essentially determined by the traders expectations about future prices. Another evidence about asset prices is that these do not seem to follow a predictable pattern over time; we observe periods of high...
Persistent link: https://www.econbiz.de/10005413133
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The Strategic Impact of Pace in Double Auction Bargaining
Gjerstad, Steven - EconWPA - 2003
This paper evaluates performance of human subjects and instances of a bidding model that interact in continuous ­time double auction experiments. Asks submitted by instances of the seller model (``automated sellers'') maximize the seller's expected surplus relative to a heuristic belief...
Persistent link: https://www.econbiz.de/10005413252