Related papers: Diverse Beliefs
This paper develops a dynamic equilibrium model where agents exhibit a strong form of belief heterogeneity: they disagree about zero probability events. It is shown that, somewhat surprisingly, equilibrium exists in this setting, and that…
Traditionally, an agent's beliefs would come from what the agent can see, hear, or sense. In the modern world, beliefs are often based on the data available to the agents. In this work, we investigate a dynamic logic of such beliefs that…
In the present paper a model of a market consisting of real and financial interacting sectors is studied. Agents populating the stock market are assumed to be not able to observe the true underlying fundamental, and their beliefs are biased…
We consider a financial market in which traders potentially face restrictions in trading some of the available securities. Traders are heterogeneous with respect to their beliefs and risk profiles, and the market is assumed thin: traders…
Belief dynamics are fundamental to human behavior and social coordination. Individuals rely on accurate beliefs to make decisions, and shared beliefs form the basis of successful cooperation. Traditional studies often examined beliefs in…
Human history has been marked by social instability and conflict, often driven by the irreconcilability of opposing sets of beliefs, ideologies, and religious dogmas. The dynamics of belief systems has been studied mainly from two distinct…
We consider the problem of belief aggregation: given a group of individual agents with probabilistic beliefs over a set of uncertain events, formulate a sensible consensus or aggregate probability distribution over these events. Researchers…
This paper proposes a unified theoretical model to identify and test a comprehensive set of probabilistic updating biases within a single framework. The model achieves separate identification by focusing on the updating of belief…
It has been observed people tend to have opinions that are far more internally consistent than it would be reasonable to expect. Here, we study how that observation might emerge from changing how agents trust the opinions of their peers in…
We propose a game-theoretic framework that incorporates both incomplete information and general ambiguity attitudes on factors external to all players. Our starting point is players' preferences on payoff-distribution vectors, essentially…
The use of equilibrium models in economics springs from the desire for parsimonious models of economic phenomena that take human reasoning into account. This approach has been the cornerstone of modern economic theory. We explain why this…
A general framework is suggested to describe human decision making in a certain class of experiments performed in a trading laboratory. We are in particular interested in discerning between two different moods, or states of the investors,…
This paper examines a heterogeneous beliefs model in which there is a process that is only partially observed by the agents. The economy contains a risky asset producing dividends continuously in time. The dividends are observed by the…
This paper proposes a belief-based framework for social norms in environments where individuals choose a single action. Relaxing the assumption that the appropriateness standard is common knowledge, the framework allows individuals to be…
A dynamical model is introduced for the formation of a bullish or bearish trends driving an asset price in a given market. Initially, each agent decides to buy or sell according to its personal opinion, which results from the combination of…
In complex systems, many different parts interact in non-obvious ways. Traditional research focuses on a few or a single aspect of the problem so as to analyze it with the tools available. To get a better insight of phenomena that emerge…
Standard models of multi-agent modal logic do not capture the fact that information is often ambiguous, and may be interpreted in different ways by different agents. We propose a framework that can model this, and consider different…
Belief change is a fundamental problem in AI: Agents constantly have to update their beliefs to accommodate new observations. In recent years, there has been much work on axiomatic characterizations of belief change. We claim that a better…
The advent and proliferation of social media have led to the development of mathematical models describing the evolution of beliefs/opinions in an ecosystem composed of socially interacting users. The goal is to gain insights into…
We study strategic interactions between firms with heterogeneous beliefs about future climate impacts. To that end, we propose a Cournot-type equilibrium model where firms choose mitigation efforts and production quantities such as to…