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When banks choose similar investment strategies, the financial system becomes vulnerable to common shocks. Banks decide about their investment strategy ex-ante based on a private belief about the state of the world and a social belief formed from observing the actions of peers. When the social...
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The author studies the evolution of the number of coexisting beliefs in a financial market. Crucially, he undertakes to do so in a framework where the paradigms, beliefs, and models driving agents behavior are left totally unspecified; i.e., the author does not make any parametric or...
Persistent link: https://www.econbiz.de/10012118241
The author studies the evolution of the number of coexisting beliefs in a financial market in a framework where the paradigm driving the agents' behavior is left unspecified. The overreaching aim is to gain insights regarding the dynamic of the variety of beliefs in an auction based financial...
Persistent link: https://www.econbiz.de/10011745418
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There are many economic environments in which an object is offered sequentially to prospective buyers. It is often observed that once the object for sale is turned down by one or more agents, those that follow do the same. One explanation that has been proposed for this phenomenon, which goes...
Persistent link: https://www.econbiz.de/10012253284
We study social learning in a social network setting where agents receive independent noisy signals about the truth. Agents naïvely update beliefs by repeatedly taking weighted averages of neighbors' opinions. The weights are fixed in the sense of representing average frequency and intensity of...
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The author sets up a simplistic agent-based model where agents learn with reinforcement observing an incomplete set of variables. The model is employed to generate an artificial dataset that is used to estimate standard macro econometric models. The author shows that the results are...
Persistent link: https://www.econbiz.de/10012120029