Complexity, Evolution and Learning: a simple story of heterogeneous expectations and some empirical and experimental validation
AbstractThis note discusses complexity models in economics. A key feature of these models is that agents have heterogeneous expectations, disciplined by adaptive learning and evolutionary selection. Agents adapt their rules based upon past observations and switch between different forecasting heuristics based upon strategy performance. We discuss how these models match empirical facts as well as laboratory experiments with human subjects and how this approach may tame the ``wilderness of bounded rationality''.
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Bibliographic InfoPaper provided by Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance in its series CeNDEF Working Papers with number 07-07.
Date of creation: 2007
Date of revision:
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Postal: Dept. of Economics and Econometrics, Universiteit van Amsterdam, Roetersstraat 11, NL - 1018 WB Amsterdam, The Netherlands
Phone: + 31 20 525 52 58
Fax: + 31 20 525 52 83
Web page: http://www.fee.uva.nl/cendef/
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Coordination of Expectations in Asset Pricing Experiments,"
Review of Financial Studies, Society for Financial Studies,
Society for Financial Studies, vol. 18(3), pages 955-980.
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Econometrica, Econometric Society,
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Handbook of Computational Economics, Elsevier,
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