By using data from surveys of expectations, it is shown that macroeconomic uncertainty, measured by the standard …

three ways: by cross-section dispersion of optimism expectations, by a GARCH series based on the optimism data and by an …

) agents do not have perfect rationality; ii) the imperfection in the agents expectations generating process may be an …

announce binary expectations of a binary event based on private signals and preceding public announcements. We replicate and … to directly observe how players update expectations and form inferences based on the announcements of others. Past … are predicted to have no effect on the subjective expectations of others, because these announcements contain no …

the other hand, expectations that are biased towards optimism worsen decision making, leading to poorer realized outcomes … on average. Optimal expectations balance these forces by maximizing the total well-being of an agent over time. We apply … our framework of optimal expectations to three different economic settings. In a portfolio choice problem, agents …