Heterogeneous expectations, adaptive learning, and evolutionary dynamics

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2010
Volume: 74
Issue: 1-2
Pages: 42-57

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper presents a linear self-referential macroeconomic model with the possibility of multiple equilibria where agents have the choice of using one of two forecasting models (one of minimum state variable form and the other of sunspot form) to form expectations of current and future prices. Endogenous predictor selection is modeled as an evolutionary game where individuals choose among the forecasting models based on relative performance. Some Nash solutions are not relevant as they are not stable under evolutionary or adaptive learning. Finally, it is shown that the sunspot equilibrium is fragile against temporary shocks to information costs.

Technical Details

RePEc Handle
repec:eee:jeborg:v:74:y:2010:i:1-2:p:42-57
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25