Beauty contested: how much of Keynes' remains in behavioural economics' beauty contests?
AbstractIn one of the most famous passages of the economic literature, John Maynard Keynes likens the stock market to a beauty contest (BC), in which the winners are those who anticipate the average opinion. In behavioural economics there have recently been attempts at investigating the BC experimentally. We argue that there exist important differences between Keynes' and behavioural economics' BCs. We identify several types of BCs and propose a taxonomy. We also suggest that, in spite of these differences, Keynes' theory of decision under uncertainty is central to understanding the actual behaviour observed in experimental BCs.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The European Journal of the History of Economic Thought.
Volume (Year): 18 (2011)
Issue (Month): 2 ()
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Other versions of this item:
- Alessandro Lanteri & Anna Carabelli, 2008. "Beauty Contested. How much of Keynes’ remains in Behavioural Economics Beauty Contests?," ICER Working Papers 20-2008, ICER - International Centre for Economic Research.
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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