Modelling the Economic Interaction of Agents with Diverse Abilities to Recognise Equilibrium Patterns
AbstractWe model differences among agents in their ability to recognise temporal patterns of prices. Using the concept of DeBruijin sequences in two dynamic models of markets, we demonstrate the existence of equilibria in which prices fluctuate in a pattern that is independent of the fundamentals and that can be recognised only by the more competent agents.
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Date of creation: Oct 2002
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DeBruijin; price fluctuations; sunspots; bounded rationality; bounded recall.;
Other versions of this item:
- Michele Piccione & Ariel Rubinstein, 2003. "Modeling the Economic Interaction of Agents With Diverse Abilities to Recognize Equilibrium Patterns," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 212-223, 03.
- Michele Piccione & Ariel Rubinstein, 2010. "Modeling the Economic Interaction of Agents with Diverse Abilities to Recognize Equilibrium Patterns," Levine's Working Paper Archive 506439000000000108, David K. Levine.
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D4 - Microeconomics - - Market Structure and Pricing
- S47 - - - - - -
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-23 (All new papers)
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