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Learning, Forecasting and Optimizing: An Experimental Study
Bao, Te; Duffy, John; Hommes, Cars - 2012
Rational Expectations (RE) models have two crucial dimensions: 1) agents correctly forecast future prices given all available information, and 2) given expectations, agents solve optimization problems and these solutions in turn determine actual price realizations. Experimental testing of such...
Persistent link: https://www.econbiz.de/10010326375
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From self-fulfilling mistakes to behavioral learning equilibria
Hommes, Cars - 2017
This essay links some of my own work on expectations, learning and bounded rationality to the inspiring ideas of Jean …-Michel Grandmont. In particular, my work on consistent expectations and behavioral learning equilibria may be seen as formalizations of … JMG's ideas of self-fulfilling mistakes. Some of our learning-to-forecast laboratory experiments with human subjects have …
Persistent link: https://www.econbiz.de/10011662516
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Bubble Formation and (In)Efficient Markets in Learning-to-Forecast and -optimise Experiments
Bao, Te; Hommes, Cars; Makarewicz, Tomasz - 2015
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...
Persistent link: https://www.econbiz.de/10011403565
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Decision and Strategies in a Sequential Search Experiment
Sonnemans, Joep - 1998
The strategy method is becoming an important tool in experimentalmethodology. This study examines how well this method works in anindividual decision experiment. Subjects are faced with a sequentialsearch problem. After extensive practice solving the problem andformulating strategies, they play...
Persistent link: https://www.econbiz.de/10010324683
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Power and the Privilege of Clarity: An Analysis of Bargaining Power and Information Transmission
de Groot Ruiz, Adrian; Offerman, Theo; Onderstal, Sander - 2011
We provide a game theoretic analysis of how power shapes the clarity of communication. We analyze information transmission in a cheap talk bargaining game between an informed Sender and an uninformed Receiver. Theoretically, we find that the maximum amount of information that can be transmitted...
Persistent link: https://www.econbiz.de/10010325901
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Information at a Cost: A Lab Experiment
Robalo, Pedro; Sayag, Rei S. - 2012
The supposed irrelevance of historical costs for rational decision making has been the subject of much interest in the economic literature. In this paper we explore whether individual decision making under risk is affected by the cost of the supplied information. Outside of the lab, it is...
Persistent link: https://www.econbiz.de/10010326404
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Bubbles, crashes and information contagion in large-group asset market experiments
Hommes, Cars H.; Kopányi-Peuker, Anita; Sonnemans, Joep - 2019
We study the emergence of bubbles in a laboratory experiment with large groups of individuals. The realized price is the aggregation of the forecasts of a group of individuals, with positive expectations feedback through speculative demand. When prices deviate from fundamental value, a random...
Persistent link: https://www.econbiz.de/10012114769
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Anticipatory Anxiety and Wishful Thinking
Engelmann, Jan; Lebreton, Maël; Schwardmann, Peter; … - 2019
It is widely hypothesized that anxiety and worry about an uncertain future lead to the adoption of comforting beliefs or "wishful thinking". However, there is little direct causal evidence for this effect. In our experiment, participants perform a visual pattern recognition task where some...
Persistent link: https://www.econbiz.de/10012114795
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Shooting the Messenger? Supply and Demand in Markets for Willful Ignorance
Shalvi, Shaul; Soraperra, Ivan; van der Weele, Joël J.; … - 2019
We investigate the role of advisers in the transmission of ethically relevant information, a critical aspect of executive decision making in organizations. In our laboratory experiment, advisers are informed about the negative externalities associated with the decision-maker's choices and...
Persistent link: https://www.econbiz.de/10012114824
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Persuasion, justification and the communication of social impact
Förster, Manuel; van der Weele, Joël J. - 2018
We experimentally investigate strategic communication about the impact of prosocial actions, which is central to policy debates about foreign aid or the environment. In our experiment, a “sender” receives an informative but noisy signal about the impact of a charitable donation. She then...
Persistent link: https://www.econbiz.de/10011932338