Rules of thumb in macroeconomic equilibrium: a quantitative analysis

Article Abstract:

A stochastic model in which agents are confronted with the explicit costs associated with sophisticated rules of behavior is examined. In this model, consumers select from savings rules that differ in complexity and effort cost, such that a consumer's gain from applying a sophisticated rule is greater than when the gain is obtained from simple rules. Results show that when sophisticated behavior is unrestricted, equilibrium occurs only when effort cost is very low. Results also show that rule-of-thumb economies lead to aggregate time series that are quite different from the standard model.

Decision-making, Decision making, Consumer behavior, Macroeconomics

---

A model of experimentation with information externalities

Article Abstract:

Research was conducted to examine a simple model of experimentation and information externality where the consequences of the actions of each agent can be costlessly observed by other agents. The model offered a complete characterization of the noncooperative equilibrium in stationary strategies which was proven to be ineffective. An extension of the basic model was also considered wherein the probability of stabilization of any arm is greater when both players are using it.

Economics, Research and Development in the Social Sciences and Humanities, Economic research

---

Similar abstracts:

• Abstracts: The use of the new macroeconometrics for policy formulation. Public-policy uses of discrete-choice dynamic programming models
• Abstracts: Child labour use and economic growth: an econometric analysis. Child Labour in Latin America: Policy and Evidence
• Abstracts: A strategic model of social and economic networks. Sorting equilibrium in a multi-jurisdiction model. The strategy-proof provision of public goods under congestion and crowding preferences
• Abstracts: Are consumption taxes really better than income taxes? Politico-economic equilibrium and economic growth. Investment and liquidation in renegotiation-proof contracts with moral hazard
• Abstracts: Median citizen's macroeconomic preference and inflationary bias. On wage indexing, policy credibility and inflation

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.