Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2017-01-30
Number: 17-018/II
Author-Name: Cars Hommes
Author-Email: C.H.Hommes@uva.nl
Author-Workplace-Name: University of Amsterdam, The Netherlands
Title: From self-fulfilling mistakes to behavioral learning equilibria
Abstract: 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 also been strongly influenced by JMG's ideas. Key features of self-fulfilling mistakes are multiple equilibria, excess volatility and persistence amplification.
Classification-JEL: D84, D83, E32, C92
Keywords: expectations, learning, bounded rationality, chaos, almost self-fulfilling equilibria, laboratory experiments
File-Url: https://papers.tinbergen.nl/17018.pdf
File-Format: application/pdf
File-Size: 941536 bytes
Handle: RePEc:tin:wpaper:20170018