EconPapers    
Economics at your fingertips  
 

Do You Know That I Know That You Know...? Higher-Order Beliefs in Survey Data

Olivier Coibion, Yuriy Gorodnichenko, Saten Kumar and Jane Ryngaert

No 24987, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We implement a new survey of firms, focusing on their higher-order macroeconomic expectations. The survey provides a novel set of stylized facts regarding the relationship between first-order and higher-order expectations of economic agents, including how they adjust their beliefs in response to a variety of information treatments and how these adjustments affect their economic decisions. We show how these facts can be used to calibrate key parameters of noisy-information models with infinite regress as well as to test predictions made by this class of models. The survey also quantifies cognitive limits of agents in the form of level-k thinking. We find little evidence that this departure from infinite regress helps reconcile the data and theory.

JEL-codes: C83 D84 E31 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-mac and nep-neu
Note: EFG ME
References: Add references at CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w24987.pdf (application/pdf)

Related works:
Working Paper: Do You Know That I Know That You Know?: Higher Order Beliefs in Survey Data (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24987

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24987

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-08-08
Handle: RePEc:nbr:nberwo:24987