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The coexistence of stable equilibria under least squares learning

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  • Kopányi, Dávid
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    In this paper we consider firms that learn about market conditions by estimating the demand function using past market data. We show that learning may lead to suboptimal outcomes even when the estimated demand function perfectly fits the observations used in the regression and firms thus perceive to have learned the demand function correctly.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0167268117301634
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    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 141 (2017)
    Issue (Month): C ()
    Pages: 277-300

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    Handle: RePEc:eee:jeborg:v:141:y:2017:i:c:p:277-300
    DOI: 10.1016/j.jebo.2017.06.005
    Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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