Many practitioners point out that the speculative profits of institutional traders arc eroded by the difficulty in gauging the price impact of their trades. In this paper. we develop a model of strategic trading where speculators face such a dilemma because of incomplete information about...

This paper experimentally investigates the nature of impulses in impulse learning. Particularly, we analyze whether positive feedback (i.e., yielding a superior payo in a game) or negative feedback (i.e., yielding an inferior payo in a game) leads to a systematic change in the individual...

This paper contrasts the concept of a complex, adaptive agent with the idea of a programmed agent, and develops a new vision of agent learning and structure. The concept of the agent is analyzed through a consideration of internal models, practice, the concept of routine and its influence on the...

Behavioral and experimental literature on financial instability focuses on either subjective price expectations (Learning-to-Forecast experiments) or individual trading (Learning-to-Optimize experiments). Bao et al. (2018) have shown that subjects have problems with both tasks. In this paper, I...

Agents in a network want to learn the state of the world from their own signals and their neighbors' reports. But they are cognitively-constrained: they have finite and heterogeneous cognitive abilities. We model cognitive ability as a measure of their sophistication when they reason on behalf...

Agents in a network want to learn the true state of the world from their own signals and their neighbors' reports. Agents know only their local networks, consisting of their neighbors and the links among them. Every agent is Bayesian with the (possibly misspecified) prior belief that her local...

Analyses of human reaction to economic incentives reveal contradictory deviations from maximization. For example, underinvestment in the stock market suggests risk aversion, but insufficient diversification of financial assets suggests risk-seeking. The leading explanations for these...

Behavioral and experimental literature on financial instability focuses on either subjective price expectations (Learning-to-Forecast experiments) or individual trading (Learning-to-Optimize experiments). Bao et al. (2017) have shown that subjects have problems with both tasks. In this paper, I...

We provide evidence of a powerful barrier to social learning: people are much less sensitive to information others discover compared to equally-relevant information they discover themselves. In a series of incentivized lab experiments, we ask participants to guess the color composition of balls...