Beauty contested: how much of Keynes' remains in behavioural economics' beauty contests?

Alessandro Lanteri and Anna Carabelli ()

The European Journal of the History of Economic Thought, 2011, vol. 18, issue 2, 269-285

Abstract: In one of the most famous passages of the economic literature, John Maynard Keynes likens the stock market to a beauty contest (BC), in which the winners are those who anticipate the average opinion. In behavioural economics there have recently been attempts at investigating the BC experimentally. We argue that there exist important differences between Keynes' and behavioural economics' BCs. We identify several types of BCs and propose a taxonomy. We also suggest that, in spite of these differences, Keynes' theory of decision under uncertainty is central to understanding the actual behaviour observed in experimental BCs.

Keywords: Beauty contest; behavioural economics; Keynes; rationality (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Working Paper: Beauty Contested. How much of Keynes’ remains in Behavioural Economics Beauty Contests? (2008)
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DOI: 10.1080/09672560903552512

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