This paper studies the behavior of the exchange rate in the Kareken-Wallace overlapping generations economy with two currencies in which decision rules are updated using the genetic algorithm. The analysis shows that a stationary monetary equilibrium of the Kareken-Wallace model is not stable...

This paper studies the behavior of the exchange rate in the Kareken-Wallace overlapping generations economy with two currencies in which decision rules are updated using the genetic algorithm. The analysis shows that a stationary monetary equilibrium of the Kareken-Wallace model is not stable...

In this paper, we extend the individual evolutionary learning model by incorporating other-regarding considerations and apply the model to some Cournot games. Using the model fitted to the experimental data of a repeated 3-player Cournot game (with nonlinear cost and demand functions), we...

A "sunspot" is a variable that has no direct impact on the economy’s fundamental condition, such as preferences, endowments or technologies, but may nonetheless affect economic outcomes through the expectations channel as a coordination device. This paper investigates how people react to...

We introduce learning based on genetic algorithms in a principal-agent model of optimal contracting under moral hazard. Applications corresponding to this setting abound in finance (credit under moral hazard), public finance (optimal taxation, information-constrained insurance), development...