Equilibrium Contracts and Boundedly Rational Expectations

Heiner Schumacher and Heidi Thysen

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We study an informed-principal framework in which the principal chooses the variables the agent is aware of. The agent fits a causal model connecting these variables to the objective probability distribution. The principal may keep her unaware of some variables so that she incorrectly extrapolates how non-equilibrium actions map into outcomes. This framework captures models of contracting with unaware agents, shrouded attributes, and overconfidence in a unified manner.

JEL-codes: D03 D82 D86 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cta and nep-mic
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Equilibrium contracts and boundedly rational expectations (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168085

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