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From Self-Fulfilling Mistakes to Behavioral Learning Equilibria

  • Cars Hommes
Chapter
Part of the Studies in Economic Theory book series (ECON.THEORY, volume 31)

Abstract

This essay links some of my own work on expectations, learning and bounded rationality to the inspiring ideas of Jean-Michel Grandmont. In particular, my work on consistent expectations and behavioral learning equilibria may be seen as formalizations of JMG’s ideas of self-fulfilling mistakes. Some of our learning-to-forecast laboratory experiments with human subjects have also been strongly influenced by JMG’s ideas. Key features of self-fulfilling mistakes are multiple equilibria, excess volatility and persistence amplification.

Keywords

Expectations Learning Chaos Almost self-fulfilling equilibria Laboratory experiments 

JEL Classification

D84 D83 E32 C92 

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Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.CeNDEFUniversity of Amsterdam and Tinbergen InstituteAmsterdamNetherlands

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