Overconfidence seems to be an essential aspect of human nature, and one way to study overconfidence is to consider students' forecasts of their exam grades. Part of a student's grade expectation is based on the student's previous academic achievements; what remains can be interpreted as...

We characterize strategy sets that are closed under rational behavior (curb) in extensive games of perfect information and finite horizon. It is shown that any such game possesses only one minimal curb set, which necessarily includes all its subgame perfect Nash equilibria. Applications of this...

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...

This paper analyses the behavior of an individual who wants to maximize his utility function, but he is not able to evaluate it. There are many ways to choose a single alternative from a given set. We show that a unique utility maximizing procedure exists. Choices induced by this optimal...

This experiment compares the price dynamics and bubble formation in an asset market with a price adjustment rule in three treatments where subjects (1) submit a price forecast only, (2) choose quantity to buy/sell and (3) perform both tasks. We find deviation of the market price from the...

In this paper we present a method for using rational expectations in a linear-quadratic optimizationframework. Following the approach put forward by Sims, we solve the model through a QZdecomposition, which is generally easier to implement than the more widely used method of Blanchardand Kahn.