Rational Expectations Equilibrium with Incomplete Information
A new perspective to rational expectations: maximin rational expectations equilibrium
... outcomes for two main reasons. First, as it is argued in de Castro-Yannelis (2008) the Bayesian expected utility (EU) preference representation is incomplete, but the MEU is complete. This is obvious in the ...
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Organization and Information: Firms' Governance Choices in Rational-expectations Equilibrium
... to equilibrium e¤ects or underlying heterogeneity in …rm characteristics is an interesting empirical question, and one that could be informed by estimates of ...
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A large-market rational expectations equilibrium model
... Rational expectations models have proved to be a workhorse for the analysis of situations involving uncertainty and private ...dispersed information of agents in the economy, given agents’ dual role ...
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A Large-Market Rational Expectations Equilibrium Model
... revealing equilibrium in a well-specified game where each trader submits a demand schedule and has incentives to rely on his private signal and on the ...revealing equilibrium the price and the private ...
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Competitive Equilibrium Hyperinflation under Rational Expectations
... We have shown in this paper that the hyperinflation phenomenon is consistent with a competitive equilibrium with rational expectations and complete information. The driving force behind that ...
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Rational Expectations Equilibrium in Economies with Uncertain Delivery
... of rational expectations ...Prudent expectations were associated to the opposite paradigm, as the market was expected to deliver the worst alternative bundle to the ...
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Rational-Expectations Equilibrium in Intermediate Good Markets
... 1 Introduction Since at least Hayek (1945), economists have understood that “We must look at the price system as... a mechanism for communicating information if we want to understand its real function” (p. 526). ...
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Rational expectations equilibrium with transaction costs in financial markets
... ˜ u = ˜ θ + ˜ ǫ, where ˜ θ and ˜ ǫ are normal random variables with expectations θ and 0, and variances σ θ 2 and σ ǫ 2 , respectively. Moreover, ˜ θ and ˜ ǫ are not correlated. There is a continuum of informed ...
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Unique equilibrium in contests with incomplete information
... Nash equilibrium exists in a large class of incomplete-information contests, provided that no player ever deems it possi- ble being the only one with a positive budget in a state where the technology ...
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Multi-asset noisy rational expectations equilibrium with contingent claims
... impound information into the prices of assets, from which the information can be partially recovered by other in- ...of information across securities and makes their prices interdependent because the ...
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Stabilizing, Pareto Improving Policies in an OLG model with Incomplete Markets: The Rational Expectations and Rational Beliefs Case.
... the Rational Beliefs story is to think of it as a logically consistent way to formalize the idea that the priors may have a permanent effect on the beliefs of ...the Rational Expectations framework ...
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A Battle of Informed Traders and the Market Game Foundations for Rational Expectations Equilibrium
... superior information is often thought to be both profitable to the individual and damaging to ...the equilibrium allo- cation converges to what would obtain in a fully-revealing Rational ...
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Rational Information Choice in Financial Market Equilibrium
... and information ag- gregator. Rational investors only value signals ante notitias (before realizations become known) if they anticipate to act on signal realizations post notitias (after realizations are ...
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Uncertainty aversion and equilibrium existence in games with incomplete information
... plete information to the case where players perceived ambiguity is not necessarily through a unique ...invariance, equilibrium existence in every game is equivalent to concavity of the ...
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Information Technology Investment and Adoption: A Rational Expectations Perspective
... paper. Expectations of profits and of relevant economic events are always essential to the analysis of financial and economic processes, and IT adoption and investment decision making are important for senior IS ...
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Strongly rational expectations equilibria with endogenous acquisition of information
... given information which is stated in Proposition ...endogenous information acquisition in the model with learning from prices implies that conditions for existence of a SREE have to be ...of ...
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Efficiency Properties of Rational Expectations Equilibria with Asymmetric Information
... generic. Rational expectations equilibria, whether fully or partially revealing, are ine±cient in the appropriate sense, for a generic subset of agents' ...any information at all is generically ...
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Dropping Rational Expectations
... general equilibrium model, with incomplete …nancial mar- kets and asymmetric information, where agents forecasted prices privately with- out rational ...[1979], equilibrium always ...
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Are Inflation Expectations Rational?
... When we repeated the experiment in the context of an environment with no signal extraction problem, the number of rejections fell significantly. But surprisingly, the rejection rate did not fall dramatically as expected. ...
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Are Inflation Expectations Rational?
... empirically, one should …nd that in‡ation expectations are unbiased and forecast errors are serially uncorrelated in a long enough sample. But it seems clear enough that over “short” sample periods, these learning ...
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