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We analyze a symmetric n-firm Cournot oligopoly with a heterogeneous population of optimizers and imitators. Imitators mimic the output decision of the most successful firms of the previous round a l`a Vega-Redondo (1997). Optimizers play a myopic best response to the opponents' previous output....
Persistent link: https://www.econbiz.de/10010333907
A learning rule is uncoupled if a player does not condition his strategy on the opponent's payoffs. It is radically …, radically uncoupled learning rules whose period-by-period behavior comes arbitrarily close to Nash equilibrium behavior in any …
Persistent link: https://www.econbiz.de/10011599374
We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...
Persistent link: https://www.econbiz.de/10011604601
realistic assumption of boundedly rational learning where agents are assumed to use only a limited set of information to form … differences in the adjustment path to the shocks to the economy when agent form expectations using our learning approach compared …
Persistent link: https://www.econbiz.de/10011605362
This essay links some of my own work on expectations, learning and bounded rationality to the inspiring ideas of Jean …-Michel Grandmont. In particular, my work on consistent expectations and behavioral learning equilibria may be seen as formalizations of … JMG's ideas of self-fulfilling mistakes. Some of our learning-to-forecast laboratory experiments with human subjects have …
Persistent link: https://www.econbiz.de/10011662516
This paper introduces the payoff-confirming analogy-based expectation equilibrium (PCABEE) as a way to refine the set of analogy-based equilibria and the associated admissible analogy partitions. In addition to the actions of others, own payoff history provides information about others'...
Persistent link: https://www.econbiz.de/10012110634
Abstract This paper explores the use of heuristic search algorithms for modeling human decision making. It is shown that this algorithm is consistent with many observed behavioral regularities, and may help explain deviations from rational choice. The main insight is that the heuristic function...
Persistent link: https://www.econbiz.de/10014587476
version of this idea, called interactive trial and error learning, which has the property that it implements Nash equilibrium …), the method requires no statistical estimation. Unlike a learning procedure proposed by Hart and Mas-Colell (2006), it … requires no knowledge of the other players' actions: learning proceeds purely by responding to one's own payoff history. The …
Persistent link: https://www.econbiz.de/10009441532
Economists traditionally tackle normative problems by computing optimal policy, i.e. the one that maximizes a social welfare function. In practice, however, a succession of marginal changes to a limited number of policy instruments are implemented, until no further improvement is feasible. I...
Persistent link: https://www.econbiz.de/10010262772
Recent literature has questioned the existence of a learning foundation for the partially cursed equilibrium. This …
Persistent link: https://www.econbiz.de/10010266678