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We study social learning in a social network setting where agents receive independent noisy signals about the truth. Agents naïvely update beliefs by repeatedly taking weighted averages of neighbors' opinions. The weights are fixed in the sense of representing average frequency and intensity of...
Persistent link: https://www.econbiz.de/10011801379
Cultural diversity is a complex and multi-faceted concept. Commonly used quantitative measures of the spatial distribution of culturally-defined groups 'such as segregation, isolation or concentration indexes' are often only capable of identifying just one aspect of this distribution. The...
Persistent link: https://www.econbiz.de/10010370655
In models of sequential decision making herd behaviour occurs if the signals smart(dumb) agents receive are (un)correlated and if agents have reputational concerns. We show thatintroducing costly effort to become informed about project payoffs (i) eliminates herdbehaviour and (ii) shifts...
Persistent link: https://www.econbiz.de/10011333265
This paper considers a simple Continuous Beliefs System (CBS) toinvestigate the effects on price dynamics of several behavioralassumptions: (i) herd behaviour; (ii) a-synchronous updating ofbeliefs; and (iii) heterogeneity in time horizons (memory) amongagents. The recently introduced concept of...
Persistent link: https://www.econbiz.de/10011334332
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In this paper, we introduce two classes of indices which can be used to measure the market perception concerning the degree of dependency that exists between a set of random variables, representing different stock prices at a fixed future date. The construction of these measures is based on the...
Persistent link: https://www.econbiz.de/10010464790
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We investigate whether two heuristics, the peak-end rule and herding, lead to cognitive biases in the index of consumer sentiment published by the University of Michigan. Both affect respondents' assessment of changes in their financial position over the past year. Consistent with the peak-end...
Persistent link: https://www.econbiz.de/10012025977
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