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dc.contributor.authorGranato, Jimen_GB
dc.contributor.authorGuse, Eran A.en_GB
dc.contributor.authorWong, M. C. Sunnyen_GB
dc.date.accessioned2006-03-14T15:01:14Z
dc.date.available2006-03-14T15:01:14Z
dc.date.created2006-02en_GB
dc.date.issued2006-03-14T15:01:14Z
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/131653
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/131653
dc.description.abstractThe assumption of perfectly rational representative agents is commonly questioned. This paper explores the equilibrium properties of boundedly rational heterogeneous agents. We combine an adaptive learning process in a modified cobweb model within a Stackleberg framework. We assume that there is an asymmetric information diffusion process from leading to following firms. In contrast to a simple cobweb model which has a unique REE, our model may produce multiple restricted perceptions equilibria (RPE). However, a unique and learnable RPE, under certain conditions, can exist in our model. In addition, the following firms’ forecasts can confound the leading firms’ forecasts - when the following firms misinterpret information coming from the leading firms. We refer this situation to the boomerang effect. We also find that the leading firms’ mean squared forecast error can be even larger than that of following firms if the proportion of following firms is sufficiently large in the market.en_GB
dc.format.extent234769 bytes
dc.format.mimetypeapplication/pdfen_GB
dc.format.mimetypeapplication/pdf
dc.language.isoen_GB
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.subjectExpectational Stability
dc.subjectInformation Diffusion
dc.subjectCobweb Model
dc.subjectHeterogeneous Expectations
dc.subject.classificationClassification-JEL: C62, D84, E37en_GB
dc.subject.otherAdaptive Learningen_GB
dc.titleLearning from the Expectations of Othersen_GB
dc.typeWorking Paper
dc.identifier.doi10.17863/CAM.5454


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