Local convergence of recursive learning to steady states and cycles in stochastic nonlinear models
Article Abstract:
Rational expectations is widely used as the equilibrium concept for dynamic economic models. This has led to increased attention given to the convergence of adaptive learning phenomena and rational expectations equilibria. To contribute to an understanding of this convergence, a study was conducted to examine learning in nonlinear models characterized by intrinsic uncertainty. Illustrative mathematical examples are presented.
Publication Name: Econometrica
Subject: Mathematics
ISSN: 0012-9682
Year: 1995
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The sequential equilibrium theory of reputation building: a further test
Article Abstract:
The qualitative predictions of a reputation building model is tested in the application of a borrower-lender game. Experiment results show that the test does not explain observed behavioral variations to parameter differences. However, borrowers show a systematic response to payoff function changes but in directions outside theory prediction. These variations cannot be linked to the reputation building theory.
Publication Name: Econometrica
Subject: Mathematics
ISSN: 0012-9682
Year: 1992
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