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Modeling the Economic Interaction of Agents With Diverse Abilities to Recognize Equilibrium Patterns

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Listed:
  • Michele Piccione

    (London School of Economics,)

  • Ariel Rubinstein

    (Tel Aviv University and Princeton University,)

Abstract

We model differences among agents in their ability to recognize temporal patterns of prices. Using the concept of DeBruijn 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 recognized only by the more competent agents. (JEL: C7, D4, S477) Copyright (c) 2003 The European Economic Association.

Suggested Citation

  • 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, March.
    • Handle: RePEc:tpr:jeurec:v:1:y:2003:i:1:p:212-223
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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