Internal Rationality, Learning and Imperfect Information
نویسندگان
چکیده
منابع مشابه
Internal rationality, imperfect market knowledge and asset prices
We present a decision theoretic framework in which agents are learning about market behavior and that provides microfoundations for models of adaptive learning. Agents are internally rational, i.e., maximize discounted expected utility under uncertainty given consistent subjective beliefs about the future, but agents may not be externally rational, i.e., may not know the true stochastic pro...
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A few decades ago macroeconomics was a field of its own. Now there is an understanding that macroeconomics should have explicit micro foundations. This project aims to look into several traditional arenas of macroeconomics from the microeconomics standpoint. Specifically, we focus on the role of imperfect information and bounded rationality for the real business cycle, growth, and money.
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The analysis explores Bayes-rational sequential decision making in a game with pure information externalities, where each decision maker observes only her predecessor’s binary action. Under perfect information the martingale property of the stochastic learning process is used to establish convergence of beliefs and actions. Under imperfect information, in contrast, beliefs and actions cycle for...
متن کاملInternal Rationality and Asset Prices
We show how standard learning rules can be interpreted as small departures from rationality in the context of an asset pricing model. We propose a distinction between internal rationality, as agents that maximize discounted expected utility under uncertainty given consistent beliefs about the future, and external rationalityas agents that know perfectly the true stochastic process for funda...
متن کاملChoice , internal consistency , and rationality
Choice, internal consistency, and rationality* Aditi Bhattacharyya Telephone: (951) 970 3431; E-mail: [email protected] Prasanta K. Pattanaik Department of Economics, University of California, Riverside, CA 92521, U.S.A. Telephone: (951) 789 7265; Fax: (951) 789 7265; E-mail: [email protected] Yongsheng Xu Department of Economics, Andrew Young School of Policy Studies, Georg...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2017
ISSN: 1556-5068
DOI: 10.2139/ssrn.3091876