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Learning from zero : how to make consumption-saving decisions in a stochastic environment with an AI algorithm

Shi, Rui - 2021 - This draft: August 16, 2021

This exercise offers an innovative learning mechanism to model economic agent's decision-making process using a deep reinforcement learning algorithm. In particular, this AI agent is born in an economic environment with no information on the underlying economic structure and its own preference....

Persistent link: https://www.econbiz.de/10012603191

Subjective models of the macroeconomy : evidence from experts and a representative sample

Andre, Peter; Pizzinelli, Carlo; Roth, Christopher; … - 2019

We propose a method to measure people's subjective models of the macroeconomy. Using a sample of 2,200 households representative of the US population and a sample of more than 1,000 experts, we measure beliefs about how the unemployment rate and the inflation rate respond to four different...

Persistent link: https://www.econbiz.de/10012104048

The effect of disaggregate information on the expectation formation of firms

Buchheim, Lukas; Link, Sebastian - 2017

This paper studies a new aspect of firms' expectation formation by asking whether expectations primarily reflect aggregate, industry-wide information (e.g., industry trends) or disaggregate information (e.g., firm-specific information). First, we show that disaggregate information is strongly...

Persistent link: https://www.econbiz.de/10011761559

The effects of monetary policy : theory with measured expectations

Roth, Christopher; Wiederholt, Mirko; Wohlfart, Johannes - 2023

We study the effects of monetary policy on aggregate consumption combining a heterogeneous agent model with measured expectations under different policy counterfactuals. We express the consumption of non-hand-to-mouth households as a function of expectations only and elicit all expectations...

Persistent link: https://www.econbiz.de/10013489702

The scope of cooperation : values and incentives

Tabellini, Guido Enrico (contributor) - 2008

Persistent link: https://www.econbiz.de/10003641773

Why not in your backyard? : on the location and size of a public facility

Bellettini, Giorgio (contributor); Kempf, Hubert (contributor) - 2008

Persistent link: https://www.econbiz.de/10003662234

The Pygmalion effect : an agency model with reference dependent preferences

Daido, Kohei (contributor); Itō, Hideshi (contributor) - 2005

We attempt to formulate and explain two types of self-fulfilling prophecy, called the Pygmalion effect (if a supervisor thinks her subordinates will succeed, they are more likely to succeed) and the Galatea effect (if a person thinks he will succeed, he is more likely to succeed). To this...

Persistent link: https://www.econbiz.de/10002756345

Intertemporal utility with heterogeneous goods and constant elasticity of substitution

Quaas, Martin F.; Baumgärtner, Stefan; Drupp, Moritz A.; … - 2019

We characterize intertemporal utility functions over heterogeneous goods that feature (i) a constant elasticity of … the goods. We find that a standard (stationary) intertemporal utility function is consistent with these two properties if … elasticities of substitution are identical, or if the instantaneous utility function is Cobb-Douglas. We also characterize the …

Persistent link: https://www.econbiz.de/10012156591

Smoking today and stopping tomorrow : a limited foresight perspective

Jehiel, Philippe; Lilico, Andrew - 2009

This paper considers an intertemporal decision problem in which the agent has limited foresight. It offers an interpretation of why people may smoke when they are young - and arguably have a short horizon of foresight and refrain from smoking when they get older - and their foresight is better.

Persistent link: https://www.econbiz.de/10003824750

Dynamic trading and asset prices : Keynes vs. Hayek

Cespa, Giovanni; Vives, Xavier - 2009

We investigate the dynamics of prices, information and expectations in a competitive, noisy, dynamic asset pricing equilibrium model. We show that prices are farther away from (closer to) fundamentals compared with average expectations if and only if traders over- (under-) rely on public...

Persistent link: https://www.econbiz.de/10003897551

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