We empirically evaluate a behavioural model with boundedly rational traders who disagree about the persistence of deviations from the fundamental stock price. Fundamentalist traders believe in mean-reversion, while chartists extrapolate trends. Agents gradually switch between the two rules,...

We consider a simple dynamic model of environmental taxation that exhibits time inconsistency. There are two categories of firms, Believers, who take the tax announcements made by the Regulator to face value, and Non-Believers, who perfectly anticipate the Regulator's decisions, albeit at a...

Interpret a set of players all playing the same pure strategy and all with similar attributes as a society. Is it consistent with self interested behaviour for a population to organise itself into a relatively small number of societies? In a companion paper we characterised how large e must be,...

This paper provides evidence of bounded rationality by large dealers in U.S. Treasury auctions. I argue that these dealers use a heuristic of yield-space bidding which leads to biases manifested in three ways: they submit dominated bids, i.e., those that could be improved without raising the...

This paper analyzes farsighted stable sets when agents have heterogeneous expectations over the dominance paths. We consider expectation functions satisfying two properties of path-persistence and consistency. We show that farsighted stable sets with heterogeneous expectations always exist and...

This paper builds on one of the results of Pruzhansky [22], namely that maximin strategies guarantee the same expected payoffs as mixed Nash equilibrium strategies in bimatrix games. We present a discussion on the applicability of maximin strategies in such class of games. The usefulness of...