Minimax Behaviour and Price Prediction
This study is an attempt to describe an abstract economic universe whose agents are confronted with the problem of price prediction. The consequences of a particular behaviour in relation to this problem are examined. The behavioural hypothesis chosen is that each agent believes the unknown price pattern to be determined by an adversary whose aim is to minimize the agent’s objective function. It follows that the forecasts made may differ from one agent to another. The purpose of the study is to show that the reactions generated by this method of prediction tend towards market equilibrium and price stability.
KeywordsUtility Function Group Decision Economic Agent Market Mechanism Labour Input
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