Firms’ Beliefs and Learning: Models, Identification, and Empirical Evidence

  • Victor AguirregabiriaEmail author
  • Jihye Jeon


This paper reviews recent literature on structural models of oligopoly competition where firms have biased beliefs about the primitives of the model—e.g. demand, costs—or about the strategic behavior of other firms in the market. We describe different structural models that have been proposed to study this phenomenon and examine the approaches that have been used to identify firms’ beliefs. We discuss empirical results in recent studies and show that accounting for firms’ biased beliefs and learning can have important implications on our measures and interpretation of market efficiency.


Dynamics Identification Learning Non-equilibrium beliefs Oligopoly competition Structural models 

JEL Classification

C57 D81 D83 D84 L13 



The authors would like to thank the comments and suggestions from the Editors, Victor J. Tremblay and Mo Xiao, and from the many generous colleagues who read a first version of this paper, and especially from Yonghong An, Avi Goldfarb, Xinlong Li, Matthew Osborne, Eduardo Souza-Rodrigues, and Erhao Xie.


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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.University of Toronto and CEPRTorontoCanada
  2. 2.Boston UniversityBostonUSA

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