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Pittel, Karen; Rübbelke, Dirk - 2009

just obeying and, hence, to be irrational. In this paper we offer a different approach which postulates rationality of all …

Persistent link: https://www.econbiz.de/10011753167

Decision Processes of a Suicide Bomber – Integrating Economics and Psychology

Pittel, Karen; Rübbelke, Dirk T. G. - 2009

This paper provides a theoretical analysis regarding the rationality of suicide attacks from an economist’s point of … psychological concepts of cognitive dissonance and terror management theory into our economic analysis, we demonstrate why … – although predicted by standard economic theory – defection is a phenomenon rarely observed. We finally present some policy …

Persistent link: https://www.econbiz.de/10011753170

Adaptive learning, persistence, and optimal monetary policy

Gaspar, Vítor; Smets, Frank; Vestin, David - 2006

We show that, when private sector expectations are determined in line with adaptive learning, optimal policy responds persistently to cost-push shocks. The optimal response is stronger and more persistent, the higher is the initial level of perceived inflation persistence by the private sector....

Persistent link: https://www.econbiz.de/10011604690

Endogenous Uncertainty and Market Volatility

Kurz, Mordecai; Motolese, Maurizio - 1999

by the beliefs and actions of agents. The theory of Rational Belief (see Kurz [1994]) permits rational agents to hold … structure of market expectations. To make the case for this theory we present a single RBE model, which builds on developments … neighbourhood requires the optimists to be in the majority but the rationality of belief conditions of the RBE require the …

Persistent link: https://www.econbiz.de/10011608491

Controlling a stock pollutant with endogenous investment and asymmetric information

Karp, Larry; Zhang, Jiangfeng - 2001

Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on firms' beliefs about future emissions policies. We compare emissions taxes and quotas when the (strategic) regulator and (nonstrategic) firms have asymmetric information about...

Persistent link: https://www.econbiz.de/10011608857

Strongly rational expectations equilibria with endogenous acquisition of information

Desgranges, Gabriel; Heinemann, Maik - 2005

This paper analyzes conditions for existence of a strongly rational expectations equilibrium (SREE) in models with private information, where the amount of private information is endogenously determined. It is shown that the conditions for existence of a SREE known from models with exogenously...

Persistent link: https://www.econbiz.de/10010265695

Cultural transmission and discrimination

Sáez-Martí, María; Zenou, Yves - 2005

Each worker belongs to either the majority or the minority group and, irrespective of the group she belongs to, can have good or bad work habits. These traits are transmitted from one generation to the next through a learning and imitation process which depends on parents' purposeful investment...

Persistent link: https://www.econbiz.de/10010267690

Systematic Mispricing in European Equity Prices?

Berneburg, Marian - 2007

One empirical argument that has been around for some time and that clearly contra- dicts equity market efficiency is that market prices seem too volatile to be optimal estimates of the present value of future discounted cash flows. Based on this, it is deduced that systematic pricing errors...

Persistent link: https://www.econbiz.de/10010269909

A Note on Kalman Filter Approach To Solution of Rational Expectations Models

Sorge, Marco M. - 2010

In this note, a class of nonlinear dynamic models under rational expectations is studied. A particular solution is found using a model reference adaptive technique via an extended Kalman filtering algorithm, for which initial conditions knowledge only is required.

Persistent link: https://www.econbiz.de/10010270416

Learning about the term structure and optimal rules for inflation targeting

Tesfaselassie, Mewael F.; Schaling, Eric; Eijffinger, … - 2006

In this paper we incorporate the term structure of interest rates in a standard inflation forecast targeting framework.We find that under flexible inflation targeting and uncertainty in the degree of persistence in the economy, allowing for active learning possibilities has effects on the...

Persistent link: https://www.econbiz.de/10010273990

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