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The curse of knowledge increases self-selection into competition : experimental evidence

Danz, David - 2014 - Rev.

The psychology literature provides ample evidence that people have difficulties taking the perspective of less-informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader...

Persistent link: https://www.econbiz.de/10010403249

A signaling model of university selection

Anić, Ivan; Božin, Vladimir; Uroševic, Branko - 2016

We propose a signaling model of student enrollment dynamics based on probabilities of completion of studies, under different rationality assumptions. There are two types of students and two schools. School of graduation serves as a signal of student productivity to prospective employers. The...

Persistent link: https://www.econbiz.de/10011421585

Excessive herding in the laboratory : the role of intuitive judgments

March, Christoph; Ziegelmeyer, Anthony - 2018

We designed four observational learning experiments to identify the key channels that, along with Bayes-rational inferences, drive herd behavior. In Experiment 1, unobserved, whose actions remain private, learn from the public actions made in turn by subjects endowed with private signals of...

Persistent link: https://www.econbiz.de/10011789104

The Social Value of Public Information When Not Everyone is Privately Informed

Chan, Stephanie - 2021

When there is strategic complementarity and all agents have access to public information, but only a subset of them has access to private information, strategic complementarity within the subset of privately-informed agents enhances the focal power of public information. This results to an...

Persistent link: https://www.econbiz.de/10013212159

Hysteresis in price efficiency and the economics of slow moving capital

Dow, James - 2020

Will arbitrage capital flow into markets experiencing shocks, mitigating adverse effects on price efficiency? Not necessarily. In a dynamic model with privately informed capital-constrained arbitrageurs, price efficiency plays a dual role, determining both the profitability of new arbitrage and...

Persistent link: https://www.econbiz.de/10012852271

Rational Bubbles and Middlemen

Awaya, Yu - 2019

This paper develops a ﬁnite-period model of rational bubbles where trade of an asset takes place through a chain of middlemen. We show that there exists a unique equilibrium, and a bubble can occur due to higher-order uncertainty. Under reasonable assumptions, the equilibrium price is...

Persistent link: https://www.econbiz.de/10012871468

Pricing Unverifiable Information

Sharma, Salil - 2020

We study markets for information in the form of Bayesian signals. The main feature of such markets is that information is costly for the seller to acquire and cannot be verified by the buyer. We provide a full characterization of the set of all compensation schemes (viz., menus) which guarantee...

Persistent link: https://www.econbiz.de/10012837761

Monetary policy under imperfect information and consumer confidence

Brenneisen, Jan-Niklas - 2020 - This version: July 23, 2020.

Although it is generally accepted that consumer confidence measures are informative signals about the state of the economy, theoretical macroeconomic models designed for the analysis of monetary policy typically do not provide a role for them. I develop a framework with asymmetric information in...

Persistent link: https://www.econbiz.de/10012269096

Beauty Contests Under Private Information and Diverse Beliefs : How Different?

Kurz, Mordecai - 2007

is used to test hypotheses of HB. We show the common knowledge assumptions of the PI theory are implausible. The theories … differ on four main analytical issues. (1) The pricing theory under PI implies prices have infinite memory and at each t … rationality conditions impose restrictions on any HB theory. We explain the tight restrictions on the model's parameters imposed …

Persistent link: https://www.econbiz.de/10012775716

Why do countries in financial distress strategically delay seeking help?

Tsoulouhas, Theofanis C. - In: Journal of government and economics : JGE 2 (2021), pp. 1-11

The paper differs from current literature by providing a systematic analysis of the relationship between sovereign debt, financial distress and political career concerns via a novel game-theoretic model, in order to analyze the strategic behavior of governments in revealing financial distress...

Persistent link: https://www.econbiz.de/10012803215