Equilibrium models with heterogeneous agents and aggregate uncertainty are difficult to analyze since policy functions and market prices depend on the cross-sectional distribution over agents' state variables which is generally a high-dimensional object. This paper develops and applies a general...

A coordination game with incomplete information is played through time. In each period, payoffs depend on a fundamental state and an additional idiosyncratic shock. Fundamentals evolve according to a random walk where the changes in fundamentals (namely common shocks) have a fat tailed...

Acceptance of computer modeling and experimentation has spread slowly at best in economics in large part because agent-based models often seem foreign to the neoclassical core of economics, as that core is understood today. But in its beginnings neoclassical economics was not built from choice...

This paper reviews a framework for numerically analyzing dynamic interactions in imperfectly competitive industries. The framework dates back to Ericson and Pakes [1995. Review of Economic Studies 62, 53–82], but it is based on equilibrium notions that had been available for some time before,...

Static stability in strategic games differs from dynamic stability in only considering the players' incentives to change their strategies. It does not rely on any assumptions about the players' reactions to these incentives and it is thus not linked with any particular dynamics. This paper...

We introduce the E-correspondence principle for stochastic dynamic expectations models as a tool for comparative dynamics analysis. The principle is applicable to equilibria that are stable under least squares and closely related learning rules. With this technique it is possible to study,...