 Coordination on saddle-path solutions: the eductive viewpoint--linear multivariate modelsRoger Guesnerie () and George Evans Post-Print from HAL Abstract: We examine local strong rationality (LSR) in multivariate models with both forward-looking expectations and predetermined variables. Given hypothetical common knowledge restrictions that the dynamics will be close to those of a specified minimal state variable solution, we obtain eductive stability conditions for the solution to be LSR. In the saddlepoint stable case the saddle-path solution is LSR provided the model is structurally homogeneous across agents. However, the eductive stability conditions are strictly more demanding when heterogeneity is present, as can be expected in multisectoral models. Heterogeneity is thus a potentially important source of instability even in the saddlepoint stable case. Keywords: Coordination; Structural heterogeneity; Strong rationality; Eductive stability; Multisectoral models (search for similar items in EconPapers) Published in Journal of Economic Theory, 2005, 124 (2), pp.202-229. ⟨10.1016/j.jet.2004.06.010⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754056 DOI: 10.1016/j.jet.2004.06.010 Access Statistics for this paper More papers in Post-Print from HAL |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.