From Self-Fulfilling Mistakes to Behavioral Learning Equilibria

Cars Hommes

Chapter Chapter 5 in Sunspots and Non-Linear Dynamics, 2017, pp 97-123 from Springer

Abstract: Abstract This essay links some of my own work on expectations, learning and bounded rationality to the inspiring ideas of Jean-Michel Grandmont. In particular, my work on consistent expectations and behavioral learning equilibria may be seen as formalizations of JMG’s ideas of self-fulfilling mistakes. Some of our learning-to-forecast laboratory experiments with human subjects have also been strongly influenced by JMG’s ideas. Key features of self-fulfilling mistakes are multiple equilibria, excess volatility and persistence amplification.

Keywords: Expectations; Learning; Chaos; Almost self-fulfilling equilibria; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C92 D83 D84 E32 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/978-3-319-44076-7_5

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