Over the course of a repeated game, players often exhibit some degree of learning in selecting their best response. Research in economics and marketing has identified two key types of learning rules: belief and reinforcement. It has been shown that players use either one of the these learning...

In a simple continuous-time model where the learning process affects the willingness to hold liquidity, we provide an intuitive explanation of business cycle asymmetry and post-crisis slow recovery. When observing a liquidity shock, individuals rationally increase their subjective probability of...

We develop a new model where the dynamic structure of the asset price, after the fundamental value is removed, is subject to two different regimes. One regime reflects the normal period where the asset price divided by the dividend is assumed to follow a mean-reverting process around a...