Learning Rational Expectations under Computability Constraints
AbstractIn this paper, the author considers how boundedly rational agents learn rational expectations when all equilibrium price functions or forecasts of future equilibrium prices are required to be computable. The paper examines two learning environments. In the first, agents have perfect information about the state of nature. In this case, the theory of machine inference can be applied to show that there is a broad class of computable economies whose rational expectations equilibria can be learned by inductive inference. In the second environment, agents do not have perfect information about the state of nature. In this case, a version of Godel's incompleteness theorem implies that rational expectations equilibria cannot be learned. Copyright 1989 by The Econometric Society.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Econometric Society in its journal Econometrica.
Volume (Year): 57 (1989)
Issue (Month): 4 (July)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Anderlini, L., 1990.
"Communication, Computability And Common Interest Games,"
159, Cambridge - Risk, Information & Quantity Signals.
- Anderlini, Luca, 1999. "Communication, Computability, and Common Interest Games," Games and Economic Behavior, Elsevier, vol. 27(1), pages 1-37, April.
- Luca Anderlini, 1995. "Communication, Computability and Common Interest Games," Game Theory and Information 9510003, EconWPA.
- Kelly, David L. & Shorish, Jamsheed, 2000. "Stability of Functional Rational Expectations Equilibria," Journal of Economic Theory, Elsevier, vol. 95(2), pages 215-250, December.
- (Vela) Velupillai, K., 1997. "Expository notes on computability and complexity in (arithmetical) games," Journal of Economic Dynamics and Control, Elsevier, vol. 21(6), pages 955-979, June.
- K. Vela Velupillai, 2010.
"Reflections on Mathematical Economics in the Algorithmic Mode,"
ASSRU Discussion Papers
1016, ASSRU - Algorithmic Social Science Research Unit.
- K. Vela Velupillai, 2012. "Reflections On Mathematical Economics In The Algorithmic Mode," New Mathematics and Natural Computation (NMNC), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 139-152.
- Chen, Shu-Heng & Yeh, Chia-Hsuan, 2002. "On the emergent properties of artificial stock markets: the efficient market hypothesis and the rational expectations hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 49(2), pages 217-239, October.
- Velupillai Kumaraswamy Vela, 2008.
"The Mathematization of Macroeconomics. A Recursive Revolution,"
Società editrice il Mulino, issue 2, pages 283-316.
- K. Vela Velupillai, 2008. "The Mathematization of Macroeconomics: A Recursive Revolution," Department of Economics Working Papers 0807, Department of Economics, University of Trento, Italia.
- Richter, Marcel K. & Wong, Kam-Chau, 1999. "Computable preference and utility," Journal of Mathematical Economics, Elsevier, vol. 32(3), pages 339-354, November.
- Koye Somefun, 2001. "Posted Offer versus Bargaining: An Example of how Institutions can Facilitate Learning," Computing in Economics and Finance 2001 79, Society for Computational Economics.
- repec:dgr:uvatin:2004077 is not listed on IDEAS
- DeCanio, Stephen J. & Watkins, William E., 1998.
"Information processing and organizational structure,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 36(3), pages 275-294, August.
- Stephen J. DeCanio & William E. Watkins, . "Information Processing and Organizational Structure," Computing in Economics and Finance 1997 163, Society for Computational Economics.
- Francesco Luna, . "Computable Learning, Neural Networks and Institutions," Computing in Economics and Finance 1996 _037, Society for Computational Economics.
- Anderlini, Luca, 1998. "Forecasting errors and bounded rationality: An example," Mathematical Social Sciences, Elsevier, vol. 36(2), pages 71-90, September.
- Brown, Paul M., 1995. "Learning from experience, reference points, and decision costs," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 381-399, August.
- Mihara, H.R., 1994.
"Arrow's Theorem and Turing Computability,"
276, Minnesota - Center for Economic Research.
- Stephen Kinsella & David M. Ramsey, 2011. "A Model of Partnership Formation with Friction and Multiple Criteria," Working Papers 201119, Geary Institute, University College Dublin.
- H. Reiju Mihara, 1997. "Arrow's Theorem, countably many agents, and more visible invisible dictators," Public Economics 9705001, EconWPA, revised 07 May 1997.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.