Conventionally, game theory predicts that the joint mixed strategy of players in a noncooperative game will satisfy some equilibrium concept. Relative probabilities of the joint strategies satisfying the concept are unspecified, and all strategies not satisfying it are assigned probability zero....

Are survey-based forecasts unbeatable? They are not. This paper introduces online price indices to forecast the Consumer Price Index. We find that online price indices anticipate changes in official inflation trends more than one month in advance. Our baseline one-month and two-month-ahead...

The paper studies a dynamic communication game in the presence of adverse selection and career concerns. A forecaster of privately known competence, who cares about his reputation, chooses the timing of the forecast regarding the outcome of some future event. We find that in all equilibria in a...

We study a two-stage purchase contract with a demand forecast update. The purchase contract provides the buyer an opportunity to adjust an initial commitment based on an updated demand forecast obtained at a later stage. An adjustment, if any, incurs a fixed as well as a variable cost. Using a...

Game-theoretic models of learning are hard to study even in the laboratory setting due to econometric and practical concerns (like the limited length of an experimental session).In particular, as the simulations by (Salmon, 2001) show, in a cross-model (or "blind'') testing of several models,...

Standard financial models assume that capital markets are fully efficient, which makes asset prices unpredictable. In contrast, the behavioural finance argues that markets may not be efficient, at least in the short term, given the limits to arbitrage. Combining both strands of literature, our...

Standard financial models assume that capital markets are fully efficient, which makes asset prices unforecastable. In contrast, the behavioral finance argues that markets may not be efficient, at least in the short term, given the limits to arbitrage. Combining both strands of literature, our...

This paper addresses the long-standing question of whether asset prices are predictable. The common view holds that daily prices fully incorporate all available information, and therefore price changes are unforecastable. This conclusion does not necessarily hold when the vast bulk of market...

This paper address the long-standing question of whether asset prices are predictable. The common view holds that daily prices fully incorporate all available information, and therefore price changes are unforecastable. This conclusion does not necessarily hold when the vast bulk of market...