IDEAS home Printed from https://ideas.repec.org/p/mil/wpdepa/2013-16.html
   My bibliography  Save this paper

Reflexivity and Equilibria

Author

Listed:
  • Francesco GUALA

Abstract

The failure of models based on rational expectations to explain the “boom and bust” of financial markets does not support Soros’ critique of mainstream economics or his call for a theoretical revolution. Contrary to what Soros says, standard rational choice theory has the conceptual resources to analyse reflexivity. The dynamic of feedback loops for example can be described by simple models based on multiple equilibria and informational cascades. The problem is that agents and theorists sometimes lack the information required to identify equilibria and tipping points.

Suggested Citation

  • Francesco GUALA, 2013. "Reflexivity and Equilibria," Departmental Working Papers 2013-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2013-16
    as

    Download full text from publisher

    File URL: http://wp.demm.unimi.it/files/wp/2013/DEMM-2013_16wp.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ignacio Palacios-Huerta, 2001. "Professionals Play Minimax," Working Papers 2001-17, Brown University, Department of Economics.
    2. Donald MacKenzie, 2006. "An Engine, Not a Camera: How Financial Models Shape Markets," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262134608, December.
    3. George Soros, 2013. "Fallibility, reflexivity, and the human uncertainty principle," Journal of Economic Methodology, Taylor & Francis Journals, vol. 20(4), pages 309-329, December.
    4. Ignacio Palacios-Huerta, 2003. "Professionals Play Minimax," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 395-415.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oscar Volij & Casilda Lasso de la Vega, 2016. "The Value Of A Draw In Quasi-Binary Matches," Working Papers 1601, Ben-Gurion University of the Negev, Department of Economics.
    2. Lackner, Mario & Sonnabend, Hendrik, 2021. "Coping with advantageous inequity—Field evidence from professional penalty kicking," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    3. Becker, Gary S. & Rubinstein, Yona, 2011. "Fear and the response to terrorism: an economic analysis," LSE Research Online Documents on Economics 121740, London School of Economics and Political Science, LSE Library.
    4. Kocher, Martin G. & Lenz, Marc V. & Sutter, Matthias, 2010. "Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment: Comment," IZA Discussion Papers 4846, Institute of Labor Economics (IZA).
    5. Benjamin J. Dyson, 2019. "Behavioural Isomorphism, Cognitive Economy and Recursive Thought in Non-Transitive Game Strategy," Games, MDPI, vol. 10(3), pages 1-14, August.
    6. Germán Coloma, 2007. "Penalty Kicks in Soccer," Journal of Sports Economics, , vol. 8(5), pages 530-545, October.
    7. Emara, Noha & Owens, David & Smith, John & Wilmer, Lisa, 2017. "Serial correlation in National Football League play calling and its effects on outcomes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 69(C), pages 125-132.
    8. Michael William Gmeiner, 2019. "History-Dependent Mixed Strategies: Evidence From Major League Baseball," Journal of Sports Economics, , vol. 20(3), pages 371-398, April.
    9. Massimiliano Landi & Domenico Colucci, 2005. "Rational and boundedly rational behavior in sender-receiver games," Working Papers 14-2006, Singapore Management University, School of Economics, revised May 2006.
    10. Van Essen, Matt & Wooders, John, 2015. "Blind stealing: Experience and expertise in a mixed-strategy poker experiment," Games and Economic Behavior, Elsevier, vol. 91(C), pages 186-206.
    11. Luigi Buzzacchi & Stefano Pedrini, 2014. "Does player specialization predict player actions? Evidence from penalty kicks at FIFA World Cup and UEFA Euro Cup," Applied Economics, Taylor & Francis Journals, vol. 46(10), pages 1067-1080, April.
    12. Fabrizio Germano & Peio Zuazo-Garin, 2017. "Bounded rationality and correlated equilibria," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(3), pages 595-629, August.
    13. Cason, Timothy N. & Friedman, Daniel & Hopkins, Ed, 2010. "Testing the TASP: An experimental investigation of learning in games with unstable equilibria," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2309-2331, November.
    14. Heifetz, Aviad & Heller, Ruth & Ostreiher, Roni, 2021. "Do Arabian babblers play mixed strategies in a “volunteer’s dilemma”?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    15. Christoph Kuzmics & Daniel Rodenburger, 2018. "A case of evolutionary stable attainable equilibrium in the lab," Graz Economics Papers 2018-05, University of Graz, Department of Economics.
    16. Joseph P. McGarrity & Brian Linnen, 2010. "Pass or Run: An Empirical Test of the Matching Pennies Game Using Data from the National Football League," Southern Economic Journal, John Wiley & Sons, vol. 76(3), pages 791-810, January.
    17. Christoph Kuzmics & Daniel Rodenburger, 2020. "A case of evolutionarily stable attainable equilibrium in the laboratory," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(3), pages 685-721, October.
    18. Spiliopoulos, Leonidas, 2012. "Pattern recognition and subjective belief learning in a repeated constant-sum game," Games and Economic Behavior, Elsevier, vol. 75(2), pages 921-935.
    19. Massimiliano Landi, 2008. "Rational and boundedly rational behavior in a binary choice sender-receiver game," Working Papers 04-2008, Singapore Management University, School of Economics.
    20. Casilda Lasso de la Vega & Oscar Volij, 2020. "The value of a draw," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(4), pages 1023-1044, November.

    More about this item

    Keywords

    reflexivity; equilibria; informational cascades;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mil:wpdepa:2013-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: DEMM Working Papers (email available below). General contact details of provider: https://edirc.repec.org/data/damilit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.