Hehenkamp, Burkhard; Kaarbøe, Oddvar M. - Institutt for Økonomi, Universitetet i Bergen - 2003
We analyze the dynamic interaction between imitation and myopic optimization in an environment of changing marginal payoffs. Focusing on finite irreducible environments, we unfold a trade-off between the degree of interaction and the size of environmental shocks. The optimizer outperforms the...