Firms' Beliefs and Learning: Models, Identification, and Empirical Evidence

Victor Aguirregabiria () and Jihye Jeon

No 13255, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper reviews recent literature on structural models of oligopoly competition where firms have biased beliefs about primitives of the model (e.g. demand, costs) or about the strategic behavior of other firms in the market. We describe different structural models that have been proposed to study this phenomenon and examine the approaches used to identify firms' beliefs. We discuss empirical results in recent studies and show that accounting for firms' biased beliefs and learning can have important implications on our measures and interpretation of market efficiency.

Keywords: beliefs; Learning; Dynamics; Identification; Oligopoly competition; Structural models (search for similar items in EconPapers)
JEL-codes: C57 D81 D83 D84 L13 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Firms’ Beliefs and Learning: Models, Identification, and Empirical Evidence (2020)
Working Paper: Firms' Beliefs and Learning: Models, Identification, and Empirical Evidence (2018)
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