This paper reports experiments designed to study strategic sophistication, the extent to which behavior in games reflects attempts to predict others' decisions, taking their incentives into account. We studied subjects' initial responses to normal-form games with various patterns of iterated...

It has been suggested that, especially in countries with high per capita income, there is an independent effect of income distribution on the health of individuals. One source of evidence in support of this relative income hypothesis are analyses of aggregate cross section data on population...

Health Expenditure has been rising faster than the growth of income in most industrial countries. The objective of this paper is to discover what factors determined Health Expenditure per head of population in the G7 Countries and whether governments could control them. The analysis has...

A dynamic decision making experiment recently conducted on individuals suggested that people may look ahead but seem either unable or unwilling to predict their own future behaviour. In order to distinguish between these two possibilities, we repeated the experiment with pairs of individuals....

This paper considers forecasting the conditional mean and variance from an ARMA model with GARCH in mean effects. Expressions for the optimal predictors and their conditional and unconditional MSE's are presented. We also derive the formula for the covariance structure of the process and its...

Conventional wisdom usually suggests that agents should use all the data they have to make the best possible prediction. In this paper, however, it is shown that agents may sometimes be able to make better predictions by throwing away old data. The optimality criterion agents adopt is the mean...