Bounded Rationality And Strategic Complementarity In A Macroeconomic Model
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Bounded Rationality And Strategic Complementarity In A Macroeconomic Model
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Author : Antúlio N. Bomfim
language : en
Publisher:
Release Date : 1996
Bounded Rationality And Strategic Complementarity In A Macroeconomic Model written by Antúlio N. Bomfim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Decision making categories.
Motivated by recent developments in the bounded rationality and strategic complementarity literatures, we examine an intentionally simple and stylized aggregative economic model, when the assumptions of fully rational expectations and no strategic interactions are relaxed. We show that small deviations from rational expectations, taken alone, lead only to small deviations from classical policy- ineffectiveness, but that the situation can change dramatically when strategic complementarity is introduced. Strategic complementarity magnifies the effects of even small departures from rational expectations, producing equilibria with policy effectiveness, output persistence and multiplier effects.
Bounded Rationality In Macroeconomics
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Author : Thomas J. Sargent
language : en
Publisher: Oxford University Press, USA
Release Date : 1993
Bounded Rationality In Macroeconomics written by Thomas J. Sargent and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Business & Economics categories.
How do people behave in new situations in which previous experience is not useful? The recent changes in Eastern Europe, for example, are unprecedented and there is not an available model on which to base the mechanisms that will govern the economics in this region. The concept of "bounded (orlimited) rationality" is being developed to analyze behavior in such situations. In this book Thomas Sargent describes and interprets the recent work in the area, especially in statistics, econometrics, networks and artificial intelligence. He focuses on examples designed to illustrate the issuesinvolved and the kinds of questions that are being asked and answered in this research. He points to further potential positive developments of the theory as well as some of its limitations.
Bounded Rationality And Industrial Organization
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Author : Ran Spiegler
language : en
Publisher: Oxford University Press
Release Date : 2011-02-18
Bounded Rationality And Industrial Organization written by Ran Spiegler and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-02-18 with Business & Economics categories.
Conventional economic theory assumes that consumers are fully rational, that they have well-defined preferences and easily understand the market environment. Yet, in fact, consumers may have inconsistent, context-dependent preferences or simply not enough brain-power to evaluate and compare complicated products. Thus the standard model of consumer behavior-which depends on an ideal market in which consumers are boundlessly rational-is called into question. While behavioral economists have for some time confirmed and characterized these inconsistencies, the logical next step is to examine the implications they have in markets. Grounded in key observations in consumer psychology, Bounded Rationality and Industrial Organization develops non-standard models of "boundedly rational" consumer behavior and embeds them into familiar models of markets. It then rigorously analyses each model in the tradition of microeconomic theory, leading to a richer, more realistic picture of consumer behavior. Ran Spiegler analyses phenomena such as exploitative price plans in the credit market, complexity of financial products and other obfuscation practices, consumer antagonism to unexpected price increases, and the role of default options in consumer decision making. Spiegler unifies the relevant literature into three main strands: limited ability to anticipate and control future choices, limited ability to understand complex market environments, and sensitivity to reference points. Although the challenge of enriching the psychology of decision makers in economic models has been at the frontier of theoretical research in the last decade, there has been no graduate-level, theory-oriented textbook to cover developments in the last 10-15 years. Thus, Bounded Rationality and Industrial Organization offers a welcome and crucial new understanding of market behavior-it challenges conventional wisdom in ways that are interesting and economically significant, and which in the end effect the well-being of all market participants.
Bounded Rationality In Economics And Finance
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Author : Christian Richter
language : en
Publisher: LIT Verlag Münster
Release Date : 2008
Bounded Rationality In Economics And Finance written by Christian Richter and has been published by LIT Verlag Münster this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Capital market categories.
The dominant hypothesis in mainstream economics is the assumption of prefect rationality. However, there are two dilemmas: Whenever this assumption was used empirical evidence turned out to be against it. Secondly, this assumption is far from reality, for example, because individuals usually do not possess all relevant information. Therefore, this volume addresses issues of bounded rationality in different areas. The first part investigates bounded rationality in financial markets, the second part investigates the effects of bounded rationality on industrial organizations and the third part deals with bounded rationality in price theory, environmental economics and public management.
Bounded Rationality In Macroeconomics
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Author : Thomas J. Sargent
language : en
Publisher:
Release Date : 1993
Bounded Rationality In Macroeconomics written by Thomas J. Sargent and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with categories.
Bounded Rationality
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Author : Graham Mallard
language : en
Publisher:
Release Date : 2020
Bounded Rationality written by Graham Mallard and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with Decision making categories.
This short book introduces the field of bounded rationality to a beginning readership in economics. It is intended to be a tour of the key concepts involved in the modelling of bounded rationality, the approaches that have been adopted and some of the most revealing, and at times surprising, findings that have been generated. The book explores how bounded rationality has been used in economic models to shed light on real life behaviour and how doing so has led to specific policy implications that would otherwise have gone unappreciated. The exposition is intended to be non-technical and free from any mathematical expressions and workings and the focus throughout is primarily on the behaviour of individuals or organisations within given situations rather than on macroeconomic concerns. How the field has evolved since the 1950s and the strengths and weaknesses of its current research programme, including its relationship with behavioural economics, are assessed.
Modeling Dynamics Optimization And Bioeconomics I
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Author : Alberto Adrego Pinto
language : en
Publisher: Springer
Release Date : 2014-06-20
Modeling Dynamics Optimization And Bioeconomics I written by Alberto Adrego Pinto and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-06-20 with Mathematics categories.
This volume explores the emerging and current, cutting-edge theories and methods of modeling, optimization, dynamics and bio economy. It provides an overview of the main issues, results and open questions in these fields as well as covers applications to biology, economy, energy, industry, physics, psychology and finance. The majority of the contributed papers for this volume come from the participants of the International Conference on Modeling, Optimization and Dynamics (ICMOD 2010), a satellite conference of EURO XXIV Lisbon 2010, which took place at Faculty of Sciences of University of Porto, Portugal and from the Berkeley Bio economy Conference 2012, at the University of California, Berkeley, USA.
Money Illusion And Strategic Complementarity As Causes Of Monetary Non Neutrality
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Author : Jean-Robert Tyran
language : en
Publisher: Springer Science & Business Media
Release Date : 2012-12-06
Money Illusion And Strategic Complementarity As Causes Of Monetary Non Neutrality written by Jean-Robert Tyran and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-12-06 with Business & Economics categories.
In principle, money illusion could explain the inertial adjustment of prices after changes of monetary policy. Hence, money illusion could provide an explanation of monetary non-neutrality. However, this explanation has been thoroughly discredited in modern economics. As a consequence, economists have ever since the 1970s searched for alternative explanations for nominal rigidity. These explanations are all based on the assumption of fully rational economic agents, holding rational expectations. This book argues that money illusion has been prematurely dismissed as an explanation of monetary non-neutrality. Methods of experimental economics are used to investigate the real aggregate effects of money illusion. It is shown that money illusion in fact causes (short-run) real income effects if strategic complementarity prevails. Strategic complementarity is an important characteristic of naturally occurring macroeconomies and is a recurrent theme in most models explaining nominal rigidity.
Near Rationality And Strategic Complementarity In A Macroeconomic Model
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Author : Antulio N. Bomfim
language : en
Publisher:
Release Date : 1992
Near Rationality And Strategic Complementarity In A Macroeconomic Model written by Antulio N. Bomfim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Competition, Imperfect categories.
Make Up Strategies With Incomplete Markets And Bounded Rationality
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Author : Michael Dobrew
language : en
Publisher:
Release Date : 2022
Make Up Strategies With Incomplete Markets And Bounded Rationality written by Michael Dobrew and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.
We study the impact of market incompleteness and bounded rationality on the effectiveness of make-up strategies. To do so, we simulate a heterogeneous-agent New Keynesian (HANK) model with reflective expectations and an occasionally-binding effective lower bound (ELB) on the policy rate. Our simulations show that make-up strategies can mitigate the negative consequences of the ELB for inflation and real economic activity. This result holds both for our HANK model as well as a corresponding representative-agent (RANK) model with complete markets, suggesting that market (in)completeness is not important for the effectiveness of make-up strategies. However, the stabilisation benefits of make-up strategies are small when agents' cognitive ability is consistent with micro-evidence. This result is independent of market (in)completeness, emphasising the importance of rational expectations for make-up strategies. Furthermore, while market incompleteness and bounded rationality complement each other in attenuating the effects of forward guidance in our model, we do not observe such a complementarity with respect to the benefits of make-up strategies.